Five years after Spain’s lockdowns, the long-term lettings market looks nothing like it did in 2020. What began as a glut of homes to rent during the pandemic has flipped into a shortage so sharp that prices in many cities are now at, or near, record highs.
The headline numbers are stark: compared with the peak in December 2020, the national supply of long-term rentals is down 56%, while advertised rents are about 30% higher. That pivot shows up clearly in the datasets behind the two charts on this page: a steep fall in available stock across most provincial capitals, paired with double-digit rent growth almost everywhere.
Five years on: how we got from glut to crunch
Cast your mind back to the end of 2020. With tourism shuttered and movement restricted, thousands of short-lets slipped onto the long-term market. Listings doubled in a matter of months and, briefly, rents softened. Then the state of emergency ended. Travel returned. Policy focused more on capping or conditioning rents than on adding new homes. Gradually, a lot of those “extra” flats went back to seasonal use or disappeared from the market altogether.
The result is today’s squeeze. Spain’s rental stock has thinned by more than half since that 2020 peak, yet demand has kept climbing — thanks to job growth in the big cities, population inflows and pricier mortgages nudging would-be buyers into renting for longer. Inevitably, prices followed demand, especially in the most dynamic urban areas.
Look at the worst-hit places and you see the pattern. According to Idealista, Barcelona’s available stock has collapsed by 84 per cent since December 2020. Madrid is down 71 per cent, Palma -73 per cent, Seville -73 per cent, Granada -71 per cent, Málaga -64 per cent, Bilbao -61 per cent, Valencia -63 per cent, San Sebastián -65 per cent and Las Palmas de Gran Canaria -70 per cent. Each of those cities has also logged hefty rent rises. In Valencia, advertised rents are now 74% higher than in late 2020; Barcelona +62 per cent; Alicante +60 per cent; Málaga +55 per cent; Palma +53 per cent; Segovia +54 per cent; Madrid +44 per cent; Santa Cruz de Tenerife +43 per cent. Even traditionally steadier northern markets show increases: Bilbao +19 per cent, Vitoria +19 per cent, Pamplona +20 per cent, San Sebastián +21 per cent.
The charts also reveal a quirk at the other end of the table. Seven capitals have grown their rental stock since 2020: Cuenca (+149 per cent), Ceuta (+81 per cent), Segovia (+48 per cent), Soria (+20 per cent), Huesca (+18 per cent), Melilla (+13 per cent) and Badajoz (+12 per cent). They’re the exceptions that prove the rule – smaller markets with different pressures, where more listings have come through and price growth has been gentler by comparison.
Where the pain is sharpest and who’s feeling it
For tenants, the maths is brutal. Fewer homes on the market means more competition at viewings, faster decision windows and tougher reference checks. In Valencia and Alicante, where asking prices have leapt 74 per cent and 60 per cent respectively, renters talk about bidding wars and deposits stretching beyond a month’s salary. In Barcelona, the combination of an 84 per cent collapse in stock and 62 per cent higher rents has pushed many house-hunters out to the commuter towns; some never make it back.
Landlords, meanwhile, face a more complicated picture. Low supply and strong demand sound attractive, but policy risk and compliance costs have risen. Several regions have experimented with ‘stressed area’ designations and caps; national rules on contract updates and agency fees have shifted. For small landlords, the temptation is to shorten leases, pivot to seasonal lets – or exit altogether. And that, of course, tightens supply further.
Developers and institutional landlords – the very players capable of adding new stock at scale – point to slow planning, construction inflation and long permitting timelines. The government’s own diagnosis acknowledges a shortfall measured in the hundreds of thousands of homes, yet schemes to accelerate build-to-rent pipelines or convert underused buildings into housing are only beginning to bite.
What it means next: policy, practical fixes and a reality check
There’s no single lever that restores balance. But the data behind these two graphics do sketch a roadmap.
First, add homes. It’s the dullest solution and the only lasting one. Fast-track approvals for build-to-rent, offer tax carrots for energy-efficient refurbishment and conversions, and get public-private partnerships moving on publicly owned plots. Where smaller capitals like Cuenca have grown stock, the pressure on prices has been notably calmer.
Second, keep tenants in place. Incentives that reward longer leases and steady rent trajectories can reduce churn without scaring off supply. Think gentle tax reliefs for landlords who commit to three- or five-year contracts, standardised templates that cut legal costs, and mediation to keep minor disputes out of court.
Third, tackle the grey areas. Illegal tourist lets are not the sole cause of the crunch, but in hot coastal markets they matter. Consistent enforcement — paired with a clear, realistic path to licensing where appropriate — would help return some homes to the residential pool.
Finally, be honest about trade-offs. Caps can buy time in the hottest postcodes, yet without new supply they tend to flatten listing numbers and store up future spikes. The lesson of 2020–2025 is written across both charts: when stock rises, rents steady; when stock vanishes, prices surge.
A few city snapshots from the data
Barcelona: Stock -84 per cent, rents +62 per cent. Europe’s poster child for scarcity.
Madrid: Stock -71 per cent, rents +44 per cent. Big demand, throttled supply.
Valencia: Stock -63 per cent, rents +74 per cent – the sharpest rise of the lot.
Málaga & Palma: Tourism magnets with stock down ~65–73 per cent, rents up ~53–55 per cent.
Alicante: Stock -51 per cent, rents +60 per cent.
Bilbao & Vitoria: Stock -61 per cent / -28 per cent, rents +19 per cent / +19 per cent.
The outliers: Cuenca +149 per cent and Ceuta +81 per cent stock growth; prices still up, but far less frenzied.
A final footnote from the small print: in Zamora, Teruel, Lugo, Huesca and Ceuta, the pool of available homes has shrunk so much that there isn’t enough data to calculate a reliable average rent for early 2025. When your sample disappears, comparison becomes impossible — which is, in itself, the story.
Spain’s rental market has flipped from pandemic surplus to structural scarcity. Unless the next five years look very different from the last five, the charts we publish in 2030 will tell the same tale – just with bigger numbers.
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