Short-Term Rentals Cannibalizing Residential Supply

The short-term rental supply has grown by 13% in the last year, representing almost 30% of the total and leaving permanent tenants with fewer options and higher prices.

The rental market in Spain is undergoing a transformation that has left many feeling like they are playing the lottery. If you are looking for stable housing, things have become difficult. The supply of properties designated for permanent rental is barely growing, while those intended for temporary stays—those rented by the week or month—are gaining ground rapidly.

According to recent analyses, short-term rentals now account for nearly **three out of every ten** rental listings nationwide. This means that for every ten flats advertised, almost three are short-term stays, leaving fewer options for those needing long-term accommodation. The average rental price in Spain stood at **15.1 euros per square meter per month** at the end of August. For an **80-square-meter** property, this translates to approximately **1,208 euros per month**, which is 66 euros more than a year ago. Over twelve months, this difference amounts to almost 800 euros.

## Competition Heats Up

But the price increases are only part of the problem. The lack of supply makes competition brutal. Some flats accumulate up to **150 inquiries** in their first ten days on the market. This gives a huge advantage to the landlord, who can afford to be much more selective. As **Sonia Campuzano**, CEO of **The Simple Rent**, says, "the rental problem has stopped being exclusively a matter of prices. We are facing an availability issue." As long as the permanent supply does not grow, market tension will remain high.

## The Weight of Temporary Rental

The difference between traditional and temporary rental is becoming increasingly pronounced. During the second quarter of the year, the availability of properties for permanent rent dropped by **0.2%** compared to the same period last year, meaning it remained practically stagnant. In contrast, the short-term rental supply increased by around **13%**.

This trend is not uniform across all cities. In **San Sebastián**, the permanent rental supply dropped by **42%** year-over-year, and in **Bilbao**, by **27%**. The decline was also noted in **Barcelona**, with a decrease of **11%**. However, in cities like **Madrid**, the permanent rental supply grew by **4%**, in **Palma** by **8%**, and in **Málaga** by **13%**.

Temporary rental has a particularly significant impact in some cities facing severe supply issues. In **San Sebastián**, it already accounts for **58%** of available listings, and in **Bilbao**, it reaches **57%**. In **Cádiz**, it is **53%**, and in **Barcelona**, it is **51%**. This means that in these four cities, at least one out of every two advertised properties is for temporary rent. In **Sevilla** and **Valencia**, its share hovers around **32%**, while in **Madrid** and **Málaga**, it is around **29%**.

## The Map of Unaffordable Housing

The pressure on prices remains high in major markets. In **Madrid**, the average rent is about **23.3 euros per square meter per month**, a **5.1%** increase from last year. Renting an **80-square-meter** flat in the capital amounts to around **1,864 euros per month**, more than 650 euros above the national average.

But price hikes are not limited to **Madrid** or **Barcelona**. In August, **47 Spanish capitals** recorded year-over-year rent increases, and several medium-sized cities saw double-digit rises. **Huesca** increased by nearly **15%**, trinc by **Huelva** with **14.6%**, **Soria** with **12.4%**, **Toledo** with **11.8%**, **Zaragoza** with **11.1%**, and **Oviedo** with **11%**.

"We are seeing how the tension is pogre shifting towards cities and metropolitan areas that, until recently, functioned as alternatives to the more expensive markets," comments **Campuzano**. "Demand seeks new territories, but if supply does not grow at the same pace, the problem simply changes postal codes."

## Bleak Outlook

The projections for the rest of the year are also not optimistic. Forecasts point to a possible reduction of around **23,000** available rental properties during **2026**. If this comes true, the rental housing stock could close the year at around **661,000 units**, compared to approximately **684,000** at the end of **2025**. This would represent a drop of more than **3%** in a single year.