“In the rental market the price has reached the limit of the tenants’ ability to pay”

The month doesn’t matter, almost not even the year. If you take a look at the latest CIS studies on the main concerns of Spaniards, there is a topic that repeats over and over in the main positions: housing. Or rather, how difficult it has become to find a home in Spain. In spring the 41.3% of respondents I recognized that this was the issue the more it kept them from sleepingabove the progress of the economy or problems related to employment.

One of the agents that has analyzed the phenomenon the most in Spain is Fotocasa, a platform that advances important changes in buying, selling and renting.

Record increases… Until when?

The Spanish real estate market is going through a peculiar situation: the price of housing continues to rise (second-hand housing at a 17.2% year-on-year and the new at 9.7%), but the purchase and sale operations take several months downjust like the signing of new mortgages. The big question is… With that backdrop, how long will prices continue to rise? Can we expect a fall in the short or medium term or, at least, some relaxation in its rise?

For Maria Matosspokesperson for Fotocasa and director of its study area, the answer is clear: the increase in prices accumulated in recent years and the increase in credit After the rate increase in June, they will end up being felt sooner rather than later in the market, softening the rise in m2.

“We are going through a turning point in which prices have reached their historical maximum, surpassing the records we had for 20 years. Citizens are facing prices that we have never seen before,” he comments. “However, with the rise in interest rates we foresee an increase in the cost of mortgages. “What is expected is that the pace of growth will moderate.”

Matos sees several interesting signs. The first, a clear difficulty for citizens to continue assuming the rise in housing prices. The second, a “change in the mortgage cycle” after the type review from the ECB a few weeks ago. “We are seeing how the access capacity of an important part of the demand, around 75%, is stretched to the limit, and also how in many areas the effort is at the highest levels in history.”

Does that mean we will see a price decline? No.

What is expected, Matos clarifies, is a certain downshift, but not negative percentages. “We will see how this rate of increase in prices of 20%, 18%, 16%… begins to moderate, that the rate of growth will tend towards normalization; but we will not see decreases because we still have a great imbalance between supply and demand that continues to push prices upwards.”

That is one of the great keys to the market.

For some time in Spain, homes have been created much higher speed from which buildings are built that can accommodate them, which adds more pressure to the market. For reference, in 2025 they were added to the registry of the Ministry of Housing 95,000 new houseswell below the 240,000 homes created, according to the INE. The Bank of Spain (BE) itself estimates the accumulated deficit between 2021 and 2025 in 750,000 houseswhich gives an indication of the huge ‘hole’ that would have to be covered to satisfy population growth.

These are compelling figures, but they fall short for the Fotocasa analysts.

Matos specifies that if both the needs of the rental market and the purchase and sale market are taken into account, this estimate would rise to up to touch two million of properties. “Our data tells us that more than 1.8 million homes would be necessary to be able to make up for the deficit we have in Spain,” he clarifies before detailing that between Madrid and Catalonia alone they would need 200,000 properties to balance supply and demand and stabilize prices.

“The problem is that many more homes are created every year than we are capable of building.” Matos admits that there are hopeful signs, such as visa increase of new construction, but dark clouds are looming on the horizon.

“We continue to encounter very important obstacles: the lack of finalized land, excessive urban bureaucracy and a increase in costs construction rate of 25%,” he comments. “Developers and builders have many difficulties developing these buildings. “There are cities in Spain where it takes longer to give you a license than to build the building itself.”

However, the expert points out an equally or even more worrying factor: lack of personnel. “We were reaching a production of about 100,000 homes per year with all the problems of finding land, financing it, buying it and developing it. Now a new obstacle is added, which is that Spain would need to incorporate 700,000 new workers to construction to respond to the housing and infrastructure needs expected for the coming years.

“Without bricklayers, formworkers, ironworkers, electricians, without construction managers it is impossible to increase the rate of production. Now that it has been diagnosed, we know why housing is not produced… If we do not resolve this labor deficit it is impossible to increase supply and alleviate the tension on prices.”

The truth is that the Fotocasa spokesperson not only anticipates changes in the buying and selling market. It also does so in residential rentals, which in recent months has already has given samples of moderation in price rise. For example, there are real estate platforms that estimate that the year-on-year increase in rents in June was 4.2%In June 2025 it was 8.9% and the previous year it was 13.5%.

Although the changes must be analyzed in the long term, Matos advances that his data invites us to think about a decrease in income of 1.6% at the national level. “We have a turning point in the market. We see how the price has reached the limit of the tenants’ ability to pay. It is something we expected because we were seeing in the last six months how it went up less and less.

“This moderation is confirmed, which begins precisely in the areas where the economic effort required of households was more extreme, where tenants could no longer continue to afford these at these prices,” reflects Matos.

The reason for that turn? In his opinion, it is not due so much to a correction in market imbalances, an increase in supply or greater accessibility, but rather to an exhaustion of the tenants. “Those who are paying the price, so to speak, are the tenants. This balance in prices or decrease is due to the fact that citizens can no longer cope with such a high price.”

If the change is confirmed, it will be, the expert acknowledges, because of how the increase in prices limits demand. “We are seeing how these tenants are literally being expelled from the market. They are deciding to delay emancipation and being expelled from large cities to more peripheral areas,” explains Matos, who also sees a transfer of demand towards shared rentals.

Images | Photohouse, Juan Domenech (Unsplash) and Joshua Aguilar (Unsplash)

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