On September 29, the Spanish government approved two emergency decrees targeting the housing market. The first measure limits annual rent increases to 2 percent, provided the rent does not exceed the official reference-price index. The second decree mandates automatic lease renewals for five-year periods, or seven years for legal entities, and requires landlords to pay compensation if they terminate contracts without legal justification.
Following the announcement, the rental market reacted quickly. Reports indicate that approximately 2,900 rental listings were removed from property portals within four hours. In Madrid, the number of available listings dropped from 11,815 to 9,398 in less than 24 hours. These regulations apply to existing contracts upon their next renewal date, raising concerns regarding the retroactive modification of private agreements.
The Spanish Congress initially rejected both decrees on October 2, with the first failing by 178 votes to 172 and the second by 184 to 166. Following the rejection, the government called for general elections on November 29. Subsequently, the Council of Ministers approved the decrees again with technical adjustments, submitting them to the Diputación Permanente, a body that replaces the full chamber during dissolution.
The housing crisis in Spain persists despite these legislative efforts. In 2025, approximately 240,000 new households were formed, while only 92,000 homes were completed. The Bank of Spain estimates an accumulated housing deficit of 750,000 units for the period between 2021 and 2025. Experts attribute this shortage to limited buildable land, slow urban development, and rigid planning standards.
