What happened to the 150,000 homes that vanished from Spain's rental market?
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Greedy landlords? Wealthy foreigners pricing everyone out? Some experts point to another reason why so many properties have left Spain's long-term rental market in recent years.
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At a time when Spaniards are once again taking to the streets to protest tourist rental accommodation and demand affordable housing, experts believe thousands of properties could have left the long-term rental market in recent years.
It's well known that Spain is suffering a housing crisis. This feels particularly true in the post-pandemic period, when a combination of low supply and increasing numbers of tourist rental accommodation has caused market inflation. In many cities across the country, prices have grown so quickly that locals are being forced out of their own neighbourhoods. Renting now costs Spaniards on average 47 percent of their salary while salaries themselves have grown by just 7.4 percent in the last three years.
Landlords (very often Spanish landlords, it should be said) are increasingly taking their rental properties off the market and converting them into much more profitable Airbnbs. Many, therefore, blame this perceived avarice as one of the underlying causes of the country's housing crisis, along with the increasing numbers of tourists and digital nomads arriving in the country, who are also contributing to the problem.
But there could also be another reason, one the Socialist-led Spanish government might not have foreseen. An interesting recent article published in Spanish daily El Mundo has pointed to the country's controversial Housing Law, which has just marked its second anniversary, as a major reason why.
Citing industry experts, it states that a staggering 150,000 rental properties in Spain have disappeared from the market since the law was passed in May 2023.
According to figures from property website Idealista, stock has fallen by 17 percent overall, while another study by the Rental Observatory of the Fundación Alquiler Seguro estimates that up to 120,000 units have disappeared and that the figure will rise to 150,000 by the end of 2025.
Reporting suggests that for four out of ten estate agencies in Spain, the supply of long-term rental properties in their portfolios has fallen by more than 50 percent since the law came into force, while demand continues to grow by more than 20 percent.
So, what happened here?
Bad lawmaking?
Prices have skyrocketed despite the government's attempted interventions, experts say, mainly due to the declining market supply. This is an increasingly common problem across the country. El Mundo cities figures showing that in Barcelona stock has fallen by 46 percent. In Córdoba, that number is 66 percent; in Bilbao and San Sebastián, 36 percent; Palma, 35 percent; Seville 31 percent; Málaga 23 percent ; and 21 percent in Madrid.
El Mundo also used a lesser known but illuminating metric to measure just how serious Spain's housing crisis has become.
'Another way of measuring this,' it states, is to look at 'the competition between prospective tenants for flats on offer". Looking at how many people are competing for rental properties in various cities: "In Barcelona, there is an average of 61 families for every advert, followed by Palma (57), Madrid (42), Bilbao (37), San Sebastián (37) and Seville (35).'
Some experts blame rent caps in 'stressed' rental markets for this. Per the Housing Law, areas considered to be 'stressed' if prices exceeded the Consumer Price Index (CPI) of their respective province by five points or where families dedicated more than 30 percent of their salary to paying the rent. This was one of the more controversial parts of the law.
So far, only Catalonia and the Basque Country have applied these caps, but Hernández and Fosch argue that the 'effect is enough to send a message to other investors and owners about what may lie ahead if all regions follow suit."
"This is therefore the fundamental reason behind the flight of many landlords from the long-term residential rental market," they add. Idealista analysed data from the 15 largest Catalan cities and saw that the number of long-term rental contracts has dropped by 21.5 percent since the Housing Law and the rental cap came into effect.
Put simply - have landlords looked at the price caps in Catalonia and the Basque Country and decided to take their properties off the market before similar rules come into place in their region?
'Many owners don't want to put their homes on the long-term rental market because of insecurity and fear of so-called inquiocupación," Ferran Font, director of research at the website Pisos.com, told El Mundo.
'We are also seeing that heirs, who previously opted to rent out their properties and obtain a return over time, are now directly opting to sell because they do not want to take risks with tenants and because they want to take advantage of current sale prices,' Font adds.
As a result, many of the properties that have been on the rental market for a long time are now being put up for sale.
Temporary rentals
Whether or not landlords actually sell, or simply remove their property from the market, many thousands of these flats end up becoming seasonal/temporary rentals or short-term tourist rentals like Airbnb.
El Mundo cites data that in Málaga, one of the cities most affected by the flight of affordable rental properties, the income from a tourist flat can exceed that of a conventional rental by up to 400 percent. Price caps and legislation in certain regions is one thing, but in many cases around other parts of Spain, the answer seems clear: profit.
In fact, many landlords now opt for seasonal rentals or rooms as a way to circumvent Housing Law rules. Temporary contracts and rooms have become a loophole for landlords who have used them as a way to put up prices and avoid estate agency fees. According to data from the specialist website Idealista, seasonal rentals have gained momentum with a 25 percent year-on-year increase in supply in the first quarter of 2025 and now account for 14 percent of the entire rental market in Spain. In Barcelona, 47 percent of homes on offer are seasonal rentals, while in San Sebastián they account for 37 percent of the total.
With all the recent legal changes and uncertainty, some landlords just prefer to leave their properties empty. According to data from a Fotocasa Research survey, almost 3 percent of homeowners in Spain have a vacant property, either because it's in an inhabitable condition, but also because of fears about non-payment or damage to the property (18 percent) and fear of not being able to recover it in the event of default (10 percent).
Clearly, a combination of factors have caused the mass flight of properties from Spain's rental market. The profit motive on behalf of landlords, of course, is one, something many in Spain might say is pure greed, but it also seems that the Spanish governments attempted market interventions such as price caps - however well intended - have caused uncertainty in the market, spooked many landlords and caused them to look for loopholes or ways around the new legislation.
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