Gonzalo Bernardos, a professor of economics at the University of Barcelona, addresses Spain’s rent challenge, calling it a national priority in the first line. While presenting the Engel & Völkers annual report, the academic notes that successive governments failed to plan and develop land for rental housing, a long-standing gap that continues to impact housing affordability.
Bernardos argues that public administrations have not expanded rental housing at the scale seen in the past, particularly during the 60s and 70s, and he urges a renewed push—even if some warn that the country is running late. He points out the absence of a formal VPO program, stating that 85,000 to 90,000 homes are delivered yearly, with fewer than 5,000 rental VPOs in place, according to his assessment.
Why do rents rise?
The Engel & Völkers report shows that average rent prices have surged in major cities and coastal areas, reaching levels as high as 2,497 euros for luxury properties in 2022. In Madrid and Barcelona, rents for upscale properties exceed 20 euros per square meter, while Valencia—despite being a center of growth—still records around 15 euros in many areas. These figures reflect a market-wide tightening driven by demand and limited supply.
Bernardos identifies several drivers behind the rental boom. One key factor is what he calls the “sinister generation”—young adults aged roughly 23 to 26 when the 2008 housing bubble burst, who have since endured ongoing uncertainty and low wages. This cohort now represents a large portion of rental demand because homeownership remained out of reach for years.
The surge in rentals also affects home sales. A highly mobile population, including foreigners living in Spain and working remotely, executives who spend several days a week in a city rental and then return to their primary residence, and students pursuing degrees away from home, all contribute to heightened rental activity and shifting housing choices.
New Housing Law
The Catalan academic notes that, given limited state action, the private sector bears a heavier burden. Some political parties have framed homeowners as the core obstruction, while the new housing law is expected to reduce available stock and disproportionately affect lower-income households. He cautions that policy incentives could encourage owners to shift to alternative rental arrangements rather than traditional leases governed by planning law, potentially intensifying competition for full homes among higher-income families.
The scholar predicts that flat owners may pivot toward renting by the room under service contracts rather than formal leases, creating a market dynamic where a larger share of central-area housing is claimed by higher earners with stronger guarantees. He stresses the concern that modest families and immigrants could face substantial hurdles in securing housing as supply becomes more fragmented and demand concentrates among those with greater financial capacity.
As an illustration, Bernardos cites a scenario where a manager rents a central apartment for 1,000 euros per month while earning about 3,000 euros, highlighting how younger workers earning between 1,200 and 1,800 euros may have to accept room rentals in central zones. If they look farther from the city center, options become more affordable, ranging from roughly 700 to 850 euros, yet the overall market remains tight and rapidly changing.