CaixaBank Research: Migration drives up housing prices in Spain

Migration pressures housing market in Madrid and Barcelona

A report by CaixaBank Research concludes that the strong influx of migrants in recent years adds pressure to housing prices in Madrid and Barcelona. This is not casual opinion, but an analysis from the research division of a major financial institution, accompanied by an uncomfortable comparison. The data supports calls for stricter migration control while reminding us that the real estate market has been overheated for two decades for other reasons.

The parallel is explicit. The study compares it with the early 2000s, when foreign arrivals surged and prices did exactly the same. The current intensity is lower, but the mechanism repeats: foreigners have a higher employment rate than Spaniards and, therefore, a greater propensity to buy or rent housing. Translated into reality: those with a paycheck look for shelter, and shelter becomes increasingly expensive.

What does the CaixaBank Research report say about housing prices?

The central conclusion of the document is that migration adds demand to an already tense market. The text does not speak of a single cause or exclusive factor: it speaks of additional pressure, which is an elegant way of saying that prices rise more than they would without this population inflow. The comparison with the cycle of the 2000s is the stinging part, because back then there was also talk of foreigners, prices, and bubbles, and we all know how it ended.

That the intensity is lower today does not change the pattern. What changes, argue some participants in the debate, is who benefits from the operation: the owner who already had the apartment, not the newcomer. The echo in the press has been wide; the issue has entered the agenda through headlines like El Confidencial, La Vanguardia or El Mundo, as well as more combative media that distrust the headline.

Why does rent consume 40% of the salary?

The arithmetic circulating is simple and brutal. For a modest home in a capital city, 1,500 euros are requested. If five people move in, it comes out to 300 euros per person, a fee that many pockets can afford. The problem appears when a family with two incomes and two children moves into that same apartment: there is no way to make it work.

This is the crux of the matter. Room-by-room rentals turn an apartment into a scalable business and squeeze housing to the last mattress. Some calculate that the average tenant spends 40% of their salary on rent and another 40% on taxes, leaving very little margin for everything else. The complete calculation, including the room-by-room breakdown and the real cost for a family, shows a difference that surprises those who only look at the listing price.

And the landlord's incentive is what it is: maximize profit. They don't care about the neighbors. There is no secret conspiracy, just a profit and loss statement that balances better with five contracts than with one.

Wage dumping and supply: the two narratives that do not fit

First narrative: supply and demand in its rawest version. More people enter needing shelter, supply does not grow at the same pace, and prices rise. Added to this: if labor arrives willing to accept less, wages are pushed down, known as wage dumping, and the tenant loses negotiating power. In this reading, a country with 12% structural unemployment does not need to import workers to fill vacancies.

Second narrative: none of the above explains why prices have been rising for two decades. Here come investment funds that do not release their portfolios to the market, banks, restricted developable land, and a suspicion, that of alleged real estate money laundering, launched without proof. The blame, they say, is not on those who arrive, but on those who buy entire buildings to not sell them.

Both narratives have a blind spot. The first does not explain the scarcity of land. The second does not explain why the cities receiving the most population are precisely those where prices rise the most.

How many immigrants live in Spain?

Here the figures vary widely. Part of the conversation speaks of 6 million and falls short for others, who raise the number to 15 million without hesitation. The discussion about the municipal register (padrón), naturalized citizens, and children of naturalized citizens ends up becoming a fight over what counts as an immigrant and what does not.

In parallel, the demographic thesis appears: if Spain had maintained a population consistent with its natural growth, we would be talking about 30 or 35 million inhabitants and a per capita income closer to that of Northern Europe. With more population, they argue, output does not grow in the same proportion and housing becomes the bottleneck where everyone fights. Without agreement on how many people there are, there is no agreement on anything.

The hypocrisy of the good neighborhood

The most uncomfortable argument points not to outsiders, but to insiders. It is argued that those who declare themselves supporters of welcoming do not want newcomers on their doorstep, and that in affluent neighborhoods prices rise equally because demand does not understand declared solidarity. The result is described as a model where quality housing becomes a scarce good reserved for those who can pay for it.

That gap, generous public discourse and evasive private behavior, is what has most peine the conversation, even more than the starting data of the report. The owner of the expensive neighborhood does not need to discuss quotas: it is enough to raise the rent.

With growing demand, restricted land, and a portfolio of apartments in the hands of those who can wait, prices will continue to rise as long as someone can pay them. Who should give up their share first?