Spain's Rental Prices Set to Rise 10% in High-Demand Areas

Solvia predicts that rental prices will rise between 5% and 8% year-on-year in the third quarter, with increases exceeding 10% in urban markets facing high demand pressure. This forecast trinc a second quarter where rents barely increased by 0.1% compared to the previous period.

The Spanish rental market shows a clear trend for the coming months: continued price growth. The II Solvia Market View report anticipates annual increases of **5% to 8%** in lease costs during the third quarter, with spikes surpassing **10%** in cities with the highest demand pressure. The cause is straightforward: there is a shortage of supply and an excess of people looking to rent.

This data is notable because it arrives just after a quarter of apparent calm. Between April and June, rents rose only **0.1%** from the previous quarter and **2.9%** year-on-year, reaching **€14.8 per square meter per month**. This was the smallest quarterly advance recorded in a second quarter since **2007**. However, this containment has not lowered levels; rents remain expensive.

## Madrid, Barcelona, and Balearic Islands Lead Price Hikes

The highest prices are concentrated in three well-known areas. **Madrid** tops the list at **€21.95 per square meter per month**, trinc by **Barcelona** (€19.46) and the **Balearic Islands** (€19.22). Renting a 90-square-meter home costs an average of **€1,331 per month** in Spain.

The upward pressure is driven by two reinforcing factors. On one hand, there is insufficient housing available to meet sustained high demand. On the other, rising purchase prices and financing difficulties are pushing households who cannot afford ownership into the rental market. This combination maintains competition for available properties and limits any possibility of sustained price drops.

## Buying Becomes More Expensive Despite Fewer Sales

The sales market shows no signs of relief. The average housing price reached **€2,487 per square meter** in the second quarter, a **9.2%** increase from a year prior, despite a drop in transactions. For the coming months, Solvia expects sales prices to maintain their upward trend, albeit with more moderate annual gains of **3% to 5%**.

Meanwhile, sales fell **5.7%** quarter-on-quarter and **2.3%** year-on-year in the second quarter. The adjustment was particularly sharp in new housing, dropping **11.5%** to **34,919 operations**, while second-hand transactions decreased **4%** to **133,015**, according to data from the College of Registrars. **Andalusia, Catalonia, the Valencian Community, and Madrid** accounted for nearly **63%** of national sales, and foreign demand hit a historic high, representing almost **16%** of operations.

"The Spanish real estate market is entering a phase of moderated activity, but this is not translating into lower prices," states **Enrique Tellado**, CEO of Intrum and chairman of Solvia. "Demand remains high, and available supply continues to be clearly insufficient to meet housing needs. Therefore, it is crucial to boost new construction, streamline urban planning processes, and foster a more balanced market that facilitates access to housing."

## Costlier Mortgages and Insufficient New Construction

Activity moderation also reached the mortgage market, with **129,240 operations** formalized during the second quarter, **3.3%** fewer than in the first three months of the year. The percentage of sales financed by mortgages rose to **77%**, reflecting greater reliance on credit for housing access. The average mortgage amount reached **€176,453**, while the average monthly installment rose to **€825**.

Households' mortgage effort stood at **34.3%** of salary, but the average hides very different realities: in the **Balearic Islands** it reaches **55.8%** and in **Madrid** **44.5%**. Added to this situation is the insufficiency of new construction. Although **25,190 building permits** were granted in April and May, **21.7%** more than in the same period last year, the report warns that development activity remains limited by scarce final land, administrative delays, construction costs, and a lack of skilled labor.

## Price Increases Spread to Affordable Neighborhoods

The report pays special attention to **Madrid, Barcelona, and Málaga**, a city joining the study of major capitals in this edition. The conclusion is that price hikes are spreading to traditionally more affordable districts, beyond areas with higher purchasing power.

In Madrid, the average housing price reached **€4,738 per square meter** in the second quarter, up **15.6%** year-on-year. **Salamanca** (€7,724/m²), **Chamberí** (€7,206), and **Chamartín** (€6,800) remain the most expensive districts, but the largest increase was recorded in **Puente de Vallecas**, with an annual rise of **20.8%**. In Barcelona, the average price was **€4,362 per square meter**; **Sarrià-Sant Gervasi** leads the table at €5,791, while the biggest annual increases occurred in **Sant Andreu** (+13.6%) and **Nou Barris** (+13.3%). In **Málaga**, the average price was **€2,854 per square meter**, with **Málaga Este** as the most expensive zone (€3,929); **Campanillas**, the most affordable district, saw the largest annual increase of **26.9%**, trinc by **Puerto de la Torre** (+19.4%) and **Ciudad Jardín** (+19.2%).

Solvia's forecast is a market estimate, not a guarantee: rental prices depend on available supply, financing, and housing policy decisions, so future figures should be treated with caution.