The Housing Crisis in Spain
The real estate agent Juan Sanchez puts on the frosted glass door of an apartment that was previously a shop. Visitors step directly into the kitchen from the streets of the Spanish capital. The ceilings are very high. "You could easily add a mezzanine here," says Sanchez and explains that the two bedrooms advertised in the basement and are quite tiny. One of them doesn’t even have a window.
The Impact of Foreign Investors
However, the room could be "slightly rented to students" for 1,300 euros if the potential buyer is ready to ignore what he calls "a little catch". The 55 square meter area, which is announced as an apartment in a bourgeois neighborhood in Central Madrid, is listed for over € 300,000. In contrast to a decade ago, when cheap loans increased real estate prices in Spain, today the sky-high prices are also powered by foreign investors with deep pockets.
The Growing Demand for Housing
According to a report by the BBVA research of the Spanish institute, the demand significantly exceeds the supply. The now difficulties in Spain have difficulties to afford to affect ranges, a situation that is reinforced by the growing proportion of houses that are rented to international tourists who visit Spain and students who are looking for accommodation. The platform reported on the greatest growth of short-term rental orders in cities such as Bilbao, Alicante, Barcelona, and Madrid.
Locals Contribute to the Deficiency
Nowadays, internet platforms such as Aippion.com even sell small living rooms to investors. With the Spanish real estate startup, users can purchase individual rooms in a common property as an alternative investment and life option. For the Madrid tenants-Union Sindicato de Inquilinas de Madrid, the practice "rampant speculation" is powered by tourism and investment funds. The group estimated that this has led to more than 4 million houses and 400,000 holiday rentals that are currently empty – in a country with 47 million people.
Housing Boom with Social Consequences
Similar to the years before the 2008 financial crisis, the real estate market in Spain again shows signs of overheating. A house that cost an average of € 138,000 in 2014 was a value of € 178,700 in 2024, according to the data from the US investment company MD Capital. In places like the Balearic Islands, prices have more than doubled. The average monthly gross salary in Spain was € 2,642, according to the economic and socio-demographic information platform.
Too Many Tourists, Too Little Social Living Space
Around 90 million international tourists visit Spain every year. Many remote workers have settled on the Canary Islands and in Barcelona, while students from all over the world flock to the country’s 90 universities and dozens of Business Schools. In the academic year 2024/2025 alone, more than 118,000 students came to Spain as part of the European Union’s exchange program. However, Spain is not publicly financed student accommodation, and there is no financial support from the state that corresponds to the BAföG aid program in Germany for students from households with low income.
Public Protests and Demands for Change
The deteriorating real estate crisis in Spain has already triggered repeated protests on the Canary Islands, in Barcelona, and Madrid. Madrid’s tenant lobby has now threatened to escalate public protests if the government did not take any greater measures: "We will raise our voices to regain what is free or rented to tourists." The Spanish Minister for Housing and Urban Planning, Isabel Rodriguez, also urges an invoice according to which vacationers have to pay 21% for rents of apartments – twice as high as the price of hotel stays. But tenant groups like Sindicatos de Inquilinas say that this is not nearly enough.
