Spain's housing crisis: an eviction, a €2,650 rent and a 750,000-home shortfall

The eviction of an 87-year-old woman from the Madrid apartment her family had rented since 1956 has become a rallying point for a nationwide protest movement over housing in Spain, where rents have risen far faster than wages and the supply of affordable homes has fallen short of demand.

María del Carmen Abascal's father first rented the apartment in Madrid's upscale Retiro neighbourhood in 1956. She continued to live there under rent control after her parents died. The building changed ownership in 2018 and she was offered the option of buying the unit. Unable to afford it, she saw the flat bought by the investment fund Urbagestión, which raised the monthly rent from 500 euros to 2,650 euros. The fund later reduced it to 1,650 euros, but Abascal, who lives on a pension, still could not pay it.

Her eviction last month brought tens of thousands of people onto the streets in cities across the country. Hundreds set up tents in Madrid's Puerta del Sol plaza, some staying for more than a week. Protesters are demanding stronger protections for tenants, lower rents and a ban on investment funds buying residential property. Their central argument is one of supply and demand: there are simply not enough affordable homes.

The numbers support that view. Rental costs have risen by an average of 84% over the past ten years, according to the property listing outlet Idealista. The southern city of Málaga has recorded an increase of 113%, while Marbella's rise was just under 150%. Average incomes have not kept pace. According to the National Statistics Institute, the average gross monthly salary in Spain is around 2,460 euros. Idealista's data for September showed that a 50-square-metre apartment in Madrid cost about 1,170 euros a month — roughly half the average monthly income.

The Bank of Spain estimates the country has a housing shortfall of about 750,000 homes. Its deputy governor, Soledad Núñez, has said the deficit could grow by another 300,000 homes between 2026 and 2028, crossing the one-million mark.

Three factors are widely cited as worsening the crisis. First, home construction has not kept up with Spain's demographic growth. About 1.2 million new households were formed between 2021 and 2025, a rise driven partly by migration, but fewer than half a million new homes were built in the same period. The 2009 eurozone crisis, which followed the 2008 global financial crisis, shrank Spain's construction industry. The COVID-19 pandemic pushed up material costs, and political differences have continued to hold back construction initiatives.

Second, tourism is adding pressure as more homes are used as short-term rentals. Madrid's tenants' union, Sindicato de Inquilinas de Madrid, estimates that more than four million homes and 400,000 holiday rentals currently stand empty. Spain's Ministry for Consumer Rights has ordered the short-term rental platform Airbnb to remove about 66,000 unlicensed listings, but local residents say the measure is not enough.

Third, public housing is limited. Spain ranks near the bottom among Organisation for Economic Co-operation and Development countries in government-owned rental properties, which account for less than 2% of the total housing stock. Madrid has only around 10,000 public housing units for its 3.5 million residents. The shortage helps explain why many young adults in Spain leave their parents' homes only after turning 30, later than in most other European countries.

Investment funds add to the strain by buying up available homes and raising rents sharply. Prime Minister Pedro Sánchez's government describes such funds as "vulture funds".

As protests continued, Sánchez put forward two emergency measures aimed largely at giving tenants more protection. On October 1, Spain's Congress rejected both proposed decrees, which was followed by further demonstrations. The defeat indicated that Sánchez's socialist government does not currently command majority support in the legislature for its housing plans. The standoff leaves the underlying shortage unresolved, with tenants, landlords, investors and the government yet to agree on how to close the gap between what homes cost and what people earn.