Spain is experiencing significant housing affordability challenges that have prompted widespread protests in Madrid. Demonstrators, including university students and working-age adults, have established tent encampments to draw attention to what they perceive as predatory practices by investment firms commonly referred to as “vulture funds.” The protesters argue that these entities purchase properties and use aggressive rent increases to displace tenants, artificially inflating housing costs across the country.
The movement gained momentum following the eviction of an 87-year-old woman from her home after an investment firm acquired the property and substantially raised her rent. Though the company subsequently invited her to return, she declined and died in hospital this week. Beyond the symbolic case, many Spaniards report personal struggles with rising rental expenses and housing instability, including retirees and immigrant populations who moved to Spain when housing was more affordable.
Data reveals the extent of the affordability challenge: rental costs have risen 84% nationally over the past decade, with some southern cities experiencing increases exceeding 150%. Public opinion surveys indicate broad support for government intervention, with majorities favoring higher taxes on large property portfolios and limits on short-term tourist rentals like Airbnb. Prime Minister Pedro Sánchez introduced emergency measures targeting housing speculation, but faced rejection in Congress, leading him to call for early elections next month.
Economic analysts attribute the crisis less to consolidation by investment firms than to underlying structural imbalances. Bank of Spain data indicates that only 8% of rental properties are held by companies, suggesting widespread ownership rather than concentrated control. Instead, researchers point to a shortage of approximately 750,000 homes, projected to reach one million by 2028, combined with demographic pressures. Between 2021 and 2025, Spain added 1.2 million new households driven by migration, but construction fell far short, delivering fewer than 500,000 new homes.
Multiple factors have constrained housing supply, including the construction industry’s contraction following earlier economic crises, elevated material costs, and political obstacles to development. Additionally, stagnant wage growth has diminished purchasing power by approximately 5% in real terms over the past decade when accounting for inflation and taxes, exacerbating affordability challenges despite rising incomes in nominal terms.
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