Spain’s Housing Crisis Deepens as Parliament Rejects Government Plan to Protect Renters

Spain’s housing crisis has deepened after parliament rejected emergency measures proposed by Prime Minister Pedro Sánchez’s government to protect vulnerable tenants, regulate parts of the rental market and address growing concerns over housing affordability.

The government suffered a major defeat in Congress on Friday, October 2, when lawmakers voted down the housing decrees. The measures were rejected by 178 votes in the 350-seat lower house after Junts, a Catalan separatist party that had previously supported the government on some issues, opposed the proposals.

The defeat comes as housing costs continue to place pressure on households across Spain. Second-hand home prices rose 11.8% year-on-year in the third quarter of 2026 to €2,930 ($3,297) per square metre, according to Idealista. Although prices continued to climb, the pace of growth slowed sharply from the 16.6% annual increase recorded a year earlier. A separate Fotocasa index showed prices rising 13.8% year-on-year to €3,136 per square metre.

The figures indicate that the market is cooling in terms of the speed of price increases, but homes are becoming more expensive from an already elevated level. Idealista data showed second-hand property prices reaching a record €2,933 per square metre in July.

The government’s rejected measures included protections against evictions of vulnerable tenants, restrictions on certain speculative property purchases and tighter regulation of short-term rentals. One proposal also sought to extend protections for existing rental contracts and limit rent increases.

The parliamentary defeat followed growing public anger over housing costs and evictions. Protests intensified after the eviction of an 87-year-old woman, Maricarmen Abascal, whose case became a symbol of the wider housing affordability debate. Demonstrations were held in Madrid and other Spanish cities as protesters demanded stronger protection for renters.

Junts argued that some of the government’s measures could have the opposite effect by reducing the supply of rental housing and pushing prices higher. Other opposition parties also rejected the decrees, exposing the difficulty faced by Sánchez’s minority government in securing parliamentary support.

Spain’s housing pressures extend beyond purchase prices. According to government data, 26.8% of households renting at market prices in 2025 spent more than 40% of their income on rent, compared with 18.6% across the European Union.

With property prices still rising and political agreement proving difficult, Spain faces a growing challenge in balancing the interests of homeowners, landlords, developers and tenants while trying to expand access to affordable housing.