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The phenomenon of Barcelona: rents continue to rise despite the measures

In Barcelona, one of the most vibrant and touristic capitals of Europe, rental prices have always been a hot topic. This year, with the entry into force of the new housing law, it seemed that the situation could stabilize, but, due to the growing foreign demand and the refusal of the Government to authorize the measures of the autonomous communities, it stays far from the reality.

On the contrary, the average rental price in the Catalan capital has increased by about 50% in the last 8 years. In the first quarter of 2023, apartment prices reached a new high of €1,087 per month, according to the latest data from the Catalan public agency Incasòl (Institut Català del Sòl). The only districts of the capital where it is still possible to rent for less than 1,000 euros per month are Horta, Nou Barris and Sant Andreu.

The increases come after the rent controls implemented in September 2020 by the regional government of Catalonia were declared unconstitutional by the Spanish courts in March 2022, since then, landlords have been able to charge market rates for the new contracts. There has also been a drastic reduction in supply, with the number of rental homes falling by more than 40% in four years.

Meanwhile, Barcelona's growing status as a business and technology hub is also driving the demand for rental housing by well-paid foreign workers: one in five people living in Barcelona is a citizen of another country, according to census data. The Barcelonians see Airbnb-style rentals as the root of the evil for increasing rents.

Prices were rising again before the COVID-19 pandemic, when tourists and locals fled the city and some have had the opportunity to buy the homes at deep discounts. In June, however, the average price in Barcelona city was €4,131 per square meter, 2.5% more than in 2022 and almost back to where they were in 2019, according to Idealista.

Likewise, in recent years Barcelona has become a city with constantly rising rents, where prices are growing almost sensationally. All the current attempts at the community level to alleviate the increases with caps fail, since the Spanish government has planned to establish measures at the national level. According to the new Housing Law, a new benchmark index will be created in 2025 to update rents, more stable and lower than the CPI, which theoretically will have a positive effect on the housing supply of Barcelona, among others.