Spain is experiencing a significant shift in its real estate market, with vacation rentals now dominating the supply, making it incredibly challenging to find a permanent rental home, especially in major cities. A recent study by Idealista shows that the number of listings for vacation accommodations is now more than double that for long-term leases.
Dramatic Decline in Long-Term Rental Supply
Since the peak of rental offerings during the pandemic in the fourth quarter of 2020, the volume of properties available for traditional rental contracts has decreased by 56%. This represents a reduction of 201,776 properties, leaving only 159,629 rental homes on the market by the end of 2024. Simultaneously, listings for temporary and vacation rentals increased by 41% and 30% respectively. Idealista highlights that the rise of these alternative uses accounts for almost half of the decline in long-term rental supply.
Vacation and Temporary Leases on the Rise
The study, based on data from Idealista itself and tourist rental portals like Airbnb and Vrbo, indicates that there are 85,632 more vacation homes and 7,510 more temporary rental properties available compared to four years ago. By the end of 2024, a total of 373,925 listings for tourist apartments were counted – a figure that far exceeds the number of apartments available for primary residence. Additionally, 25,979 homes are offered as temporary leases. This type of contract, often intended for a limited period, is increasingly suspected of being misused to circumvent tenant protection laws. A bill to regulate these contracts has already been introduced in Congress, with negotiations still ongoing.
Impact in Spain’s Metropolises
The decline in long-term rentals in favor of tourist and temporary rental homes is particularly pronounced in Spain’s major cities. Since the last quarter of 2020, the supply of primary residences has fallen by 84% in Barcelona, 71% in Madrid, 63% in Valencia, and 64% in Málaga. This means tens of thousands fewer apartments are available in these cities compared to four years ago.
- Barcelona: 40,827 fewer apartments (Vacation rentals: 14,948 vs. Long-term rentals: 7,925)
- Madrid: 57,580 fewer apartments (Vacation rentals: 21,639 vs. Long-term rentals: 22,978)
- Valencia: 9,940 fewer apartments (Vacation rentals: 9,192 vs. Long-term rentals: 3,940)
- Málaga: 6,921 fewer apartments (Vacation rentals: 9,216 vs. Long-term rentals: 5,839)
Interestingly, in all mentioned cities except Madrid, the volume of properties listed as vacation rentals is higher than that of long-term rentals. In Madrid, the numbers are nearly balanced.
Regulatory Changes and Growing Population Drive Prices
Idealista attributes the dwindling supply of rental properties to changes in regulation. According to them, these changes have deterred some owners from offering their apartments for rent, leading them to opt for more profitable alternatives like tourist or temporary leases, or even to leave properties vacant or sell them. The sale of used homes has steadily increased in recent months.
This supply decline occurs against a backdrop of continuous population growth in major cities. Since 2020, Madrid, Barcelona, Valencia, and Málaga have gained tens of thousands of new residents, according to the INE. This leads to increasing demand, driving rental prices higher and making access to affordable housing more difficult.
