The surge in housing prices over recent years has widened the gap for lower-income households seeking a home. Since 2015, the average purchase price nationwide climbed by about 30%, while rents rose around 60%, according to Brainsre. The trend is even sharper in large cities like Madrid or Barcelona, where real estate values exceed the national average. Before this dramatic ascent, the sector faced a housing market bust that dented its credibility.
From 2008 onward, various public administrations reduced subsidies for officially protected housing. A prominent voice has noted that affordable housing has not been built in Spain since 2008, and at times the protected option became more expensive than the free market because the latter had sunk. The former Barcelona mayor and current president of the Association of Rental Home Owners (ASVAL) argued that resuming subsidies for protected housing could kickstart a stock of affordable rentals.
Another proposal to address housing accessibility comes from Rafael Angulo, head of the Metropolitan House Foundation. He suggests leveraging public land by creating a social housing portfolio under local control and launching land development that is tendered in exchange for a public housing contribution to a municipal institution.
Collaboration formulas
In recent months, public-private partnerships have emerged to expand the supply of affordable, high-quality rental housing. Two notable initiatives were launched in Madrid: the Plan Vive of the Community and a City Council program. While the former continues, interest from some real estate companies has waned, as shown by early phases of Vive where several parcels were abandoned.
Experts emphasize that public authorities must work closely with private players. In many cases, tenders from the public sector include features that do not align with actual demand. The executive in wealth management at Stoneweg, a firm investing in residential rentals in Spain, notes that public bodies have shown a reluctance to seek assistance. He argues that coordinated working groups between governments and private firms should be encouraged to develop joint solutions.
Rental market status
Eurostat’s 2020 data show Spain as a net landlord country, with about 24.9% of residents renting their homes. The European average sits around 30.3%, and neighboring nations reach higher levels, such as Germany at 49.6% or France at 36%. The current trend suggests Spain may need to Europeanize its housing model. A former minister and Barcelona mayor contends that renting should not be viewed as a last resort; rather, it can be a strategic choice. The belief that ownership is the only path to security can mislead people for several years after they buy. The idea is that affluence often correlates with higher home ownership rates, not necessarily with greater personal wealth.
Rafael Angulo reiterates that the rental market is a promising pathway for the future: demand remains strong, supply is tight, land is scarce, and the process to qualify land can be lengthy. Cristina Mora, co-founder of the architecture studio 08023, adds that society demands more flexibility and a broader spectrum of living arrangements. People increasingly live in homes that accommodate evolving family models and modern lifestyles, not just the configurations of a century ago.
One of the most effective approaches has been build-to-rent: purpose-built homes designed for long-term rental. This sector has grown in response to a shortage of high-quality rental stock. International funds like Ares Asset Management, through its Avalon Properties platform, have become active players, joined by Talus Real Estate, Socimi Global Pielago, CBRE IM, Catella AM, and Lazora. Insurers such as Axa and Allianz have also shown interest. Developers including Aedas, Neinor, and Via Célere deliver completed rental properties to funds or investment vehicles. While the footprint remains strongest in Madrid and Barcelona, the model has quickly expanded to other major cities such as Malaga and Valencia, shaping the contemporary rental landscape across the country.