Two Years Since the Housing Law: What’s Happened?
Two years after the introduction of Spain’s Housing Law in 2023, the country is facing a worsening rental crisis. Instead of easing pressure, the law has contributed to a significant imbalance between supply and demand.
Between May 2023 and April 2025, the number of available long-term rental properties dropped by 17%, while demand soared by 79% nationwide. Rents have climbed dramatically, with an average national increase of 24%.
Where Is the Impact Being Felt Most?
Demand has spiked in several key Spanish cities, most notably:
- Bilbao: +194% increase in demand
- Seville: +142%
- Palma: +109%
- Barcelona: +99%
Even in more stable markets like Madrid, Alicante, Valencia, and Málaga, demand continues to outpace available rental stock, keeping pressure on pricing.
Shift Towards Seasonal Rentals
As regulation increases and rental price caps become more stringent, many property owners are exiting the long-term market. Seasonal rentals have risen by 25% year-on-year and now represent 14% of all rental offerings in Spain.
This migration toward short-term leasing is often driven by fewer legal restrictions, higher yields, and the growing tourist economy—especially in regions like the Costa del Sol and Balearic Islands.
What Is the Government Doing?
The government has signalled its intention to regulate both seasonal and room rentals more closely, hoping to curb landlord circumvention of the Housing Law. However, many in the real estate industry argue that tighter controls may further reduce supply and push investors away from the long-term sector entirely.
Calls for incentive-driven reform continue, with suggestions to offer tax benefits and legal clarity to responsible long-term landlords rather than relying solely on restrictive policy measures.
Quick Takeaways
- 17% decrease in long-term rental supply
- 79% surge in nationwide rental demand
- 24% increase in average rents over two years
- 14% of the rental market now seasonal
- Government plans to expand regulation on short-term lets