Rent Cap Slows Price Growth but Stalls the Market
Catalonia has marked one year since implementing rent controls, remaining the only Spanish region to enforce the Housing Law extensively. While the policy has led to a slight decline in rental prices, it has also resulted in a market slowdown, with supply shortages persisting. Both landlords and tenants report ongoing difficulties in securing affordable rentals, highlighting a rare point of consensus in an otherwise polarized debate.
Moderate Price Decline but Market Stagnation
According to data released by Incasòl on Friday, rental prices in 140 municipalities declared “high-pressure zones” (including Barcelona) have shown a moderate decrease since rent caps were introduced in March 2023. Between the first and fourth quarters of 2024, average rents fell by 3.7%, from €911 to €878 per month.
Barcelona, the center of Spain’s housing crisis, saw an even sharper decline of 6.4%, bringing the average monthly rent to €1,117—still making it one of the most expensive cities in the country.
However, when looking at 2024 as a whole, rental prices still show a slight year-over-year increase, as rents surged significantly in early 2024 before the price cap took effect.
Fewer Rental Contracts Signed
A key concern in the real estate sector is the sharp drop in new rental contracts. In Barcelona, rental agreements fell by 17% in the three quarters following the law’s implementation compared to the same period in 2023.
Similarly, in all 140 regulated municipalities, new lease agreements declined by 21% from the first to the fourth quarter of 2024. The gap between new leases and contract terminations has also narrowed to historic lows—excluding the pandemic year.
In Barcelona alone, 32,903 new contracts were signed in 2024, while 30,179 were terminated, leaving a net gain of just 2,724 leases—of which 71% were signed before rent caps took effect.
“The market is stagnating. New rental properties are entering at a much slower pace, and some are shifting to the sales market,” says Òscar Gorgues, manager of the Barcelona Chamber of Urban Property. Government officials, however, argue that longer lease durations are a sign of market stability.
Short-Term Rentals Surge Amid Housing Shortages
Another emerging trend is the 45% rise in short-term rental listings in 2024. The Catalan government has pledged to crack down on fraudulent seasonal rentals through stricter registration and penalties.
Meanwhile, tenant advocacy groups, such as Sindicat de Llogateres, continue to push for further regulation, arguing that rental prices remain unaffordable for many residents. A nationwide protest is scheduled for April 5, with demonstrations planned in Barcelona and other major cities to demand stronger tenant protections.
Conclusion
While rent caps have slowed price increases, they have also discouraged new lease agreements and exacerbated supply shortages, making it harder for renters to find available homes. With demand at record highs—54 applicants per rental listing compared to 40 before regulation—Catalonia’s housing crisis remains unresolved, fueling ongoing tensions between policymakers, landlords, and tenants.
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