For decades the housing market has been one of the drivers, and one of the weak points, of the Spanish economy. Anyone wanting to buy or rent in Spain should know its recent history and the most common risks.
The bubble and the crash
Between the late 1990s and 2007 Spain had a huge building boom: it built more homes than France, Germany and Italy combined, prices rose by over 150% and credit was easy. In 2008 the bubble burst: hundreds of thousands of homes went unsold, many families lost their homes because they could not pay their mortgages, savings banks failed and in 2012 the State had to ask Europe for help to rescue the banking system. Unfinished developments still stand in many coastal resorts (see the 2008-2012 crisis).
Today's housing crisis
After 2014 the market recovered, and in recent years the opposite has happened: little supply and fast-rising prices. The causes include little new building after the crisis, population growth, purchases by investors and foreigners and the conversion of many flats into tourist lets. Rents have risen most in Madrid, Barcelona, Valencia, Málaga, the Balearics and the Canaries, and many young people cannot leave their parents' home. In 2024 and 2025 tens of thousands demonstrated in many Spanish cities for the right to housing.
Policy responses have included the 2023 national housing law, allowing communities to declare "stressed areas" with rent caps; restrictions or moratoriums on new tourist licences in cities such as Barcelona, which has announced the end of tourist flats by 2028, Madrid, Málaga and the Balearics; the national register of short-term rentals from 2025; the abolition of the golden visa; and public rental housing programmes. Debate on which measures work remains heated.
Risks for buyers
- Illegal building: especially for country homes and coastal areas, extensions or whole buildings may lack a licence; in some cases demolitions have been ordered. Check planning status with the town hall.
- Debts and charges: community-fee and IBI debts from recent years can pass to the new owner; check the nota simple and certificates.
- Occupied properties: squatting (okupas) is much discussed; it mainly affects empty homes owned by banks and funds. Before buying at auction or at very low prices, check the home is vacant.
- Scams: beware of ads that look too good, of anyone asking for deposits without a contract or owners who cannot show the property.
- Off-plan homes: insist on a bank guarantee for advance payments.
Tips
Use an independent lawyer, don't sign documents in Spanish you don't understand, view the property several times and check local rules on tourist lets before counting on that income. See buying property in Spain and legal procedures.