The government is moving forward with the final phase of housing legislation, aiming to reshape access to living space. This includes an agreement with political groups to advance a landmark housing law, paired with announcements about actions like mobilizing 50,000 properties from Sareb, the so-called bad bank that holds distressed real estate assets from the financial sector. Following the 2008 crisis, corporate housing policies left Spain with a lag in the EU, and authorities now plan to assign 21,000 of these properties to autonomous regions and municipalities. The latest plan also commits to financing 43,000 affordable rental homes, recognizing that for young people it is increasingly difficult not only to buy but also to rent.
What is the weight of rent in the real estate market?
Spain has traditionally been a nation of homeowners. While rental housing is gaining ground, it still accounts for about 17 out of every 100 dwellings. As of July 1, 2021, around 15.9% of Spanish households lived in rental homes, a rate up 2.4 points from 2011 when 13.5% rented. In a later national survey, nearly three-quarters of households—75.2%—owned their homes, compared with 78.9% in 2011. The latest INE data show that at least 481,000 rented households spend more than 40% of their net income on rent, underscoring affordability pressures.
What factors affect buying or renting?
In recent years, owning a home has often looked cheaper than renting. Low interest rates helped, alongside a conventional down payment of about 20% of the purchase price. By April 2022, the Euribor reference rate used for variable-rate mortgages stayed negative for six years, resulting in a very low overall cost of home ownership relative to rent. That trend shifted after geopolitical events and rising prices, prompting the government to cap rent increases during the housing law negotiations with EH Bildu and ERC. The cap applies through the current year and will be reviewed for 2025, with a benchmark-adjusted approach beyond that. Before the cap, rents rose sharply, while a typical mortgage on a €150,000 loan hovered around €540 per month with a long repayment period. By comparison, the average rent for a similar 100-square-meter apartment reached around €1,000 in March last year and roughly €1,100 today, with wide city-to-city variation—from about €1,800 in Barcelona to €730 in smaller cities such as Soria. These dynamics illustrate how price gaps between buying and renting fluctuate across regions.
Can an increase in the price of money change the trends?
Rising interest rates hit floating-rate mortgages the hardest, especially for borrowers early in the repayment schedule where interest payments dominate. New fixed-rate mortgages also became more expensive after a period of comparatively low costs. Meanwhile, a tight rental market makes rental units less affordable, particularly for middle- and lower-income households. INE figures show that nearly half a million rental households allocate more than 40% of their income to rent. As a result, rent increases were limited this year and are set to face a 3% cap next year under the housing law. Some industry voices warn that the combination of higher finance costs and restricted supply could slow activity and raise concerns about a potential housing market correction.
What is the role of the public sector?
Public involvement in housing has waned over time. In the 1980s, social housing represented about half of the market; today it stands around 2.6% and lags behind many EU peers. Across the European Union, social housing typically accounts for 9% of total housing stock, with notably higher shares in the UK (around 18%), Austria (mid-20s), and the Netherlands (about 30%). The number of social rental units remains very small in Spain. The latest data from 2019 show only 2,479 social rental homes were built nationwide. The government now seeks to expand this supply through Sareb properties, aiming to broaden affordable housing options for vulnerable households and to stabilize the rental market while aligning with broader EU trends (Source: national statistics and housing policy analyses).