A NEW study from Idealista has revealed how suburban towns in Spain are seeing higher rental demand than large cities, indicating a shifting housing market as renters seek cheaper options outside increasingly expensive urban centres.
Idealista – the biggest online property portal in Spain – gauges rental pressure by looking at the number of email inquiries and offers per ad in a given municipality.
Idealista releases the data quarterly, with the latest applying to the fourth quarter of 2023.
It shows that all but two of the 10 municipalities with the highest rental demand are located in the outskirts of Madrid and Barcelona.
The Madrid suburbs of Fuenlabrada and Getafe are the first and second most in-demand cities for renters respectively, while Santa Coloma de Gramanet in Barcelona comes in at number three.
Next is Vitoria-Gasteiz in the Basque province of Álava, followed by Barcelona’s Hospitalet de Llobregat, Madrid’s Mostoles and Barcelona’s Terrassa.
Rounding out the top 10 are Alcala de Henares outside Madrid, Barcelona’s Badalona, and Arona in Santa Cruz de Tenerife.
Meanwhile, the highest ranking provincial capital was Vitoria-Gasteiz, followed by Pamplona at 14th and Barcelona and Madrid, ranking 17th and 18th respectively.
The trend of demand in smaller towns with cheaper rents outpacing provincial capitals occurred throughout Spain, with the Valencian town of Torrent ranking 13th while Valencia city ranked 27th.
In Tarragona, the towns of Reus and Calafell ranked 16th and 34th respectively, while Tarragona itself ranked 35th.
The same phenomenon can be seen in Andalucia.
The town of Dos Hermanas in the Sevilla province outranked Sevilla city in terms of demand, while in Cadiz, Jerez de la Frontera outranked Cadiz city.
Lower rents, greater demand
Idealista’s data shows that cheaper suburban towns often experience higher rental demand than population nuclei.
An apartment in Madrid, among Spain’s most expensive cities, costs an average of €18.3 per square metre to rent
On the other hand, Fuenlabrada — the most in-demand city in Spain for renters, which lies about 17 kilometres outside of central Madrid — averages just €10.2 per square metre.
Looking at Barcelona, it costs an average of €20.8 per square metre to rent in the city itself, while Santa Coloma de Gramanet — which has the third highest rental demand — costs an average of €14.9 per square metre.
Seven towns in the Barcelona community outranked Barcelona city in demand, all seven of which have lower average rents per square metre than Barcelona.
High rents and suburbanization
For lower income renters in Spain, skyrocketing rents are turning a life in bustling city centres into an increasingly unaffordable luxury, sending many to search for more affordable options in the suburbs.
Idealista data shows that average rental prices in Spain reached an all-time high in January 2024, at €12.4 per square metre.
While rents have also increased in smaller towns, the trend is especially pronounced in urban centres.
For example in Madrid, average rental price per square metre increased by 14.1% between January 2023 and January 2024, from €16 per square metre to a record high of €18.3.
Looking further back, average rents in Madrid increased by more than 60% between January 2014 and January 2024.
Meanwhile, in the Madrid suburban town of Alcalá de Henares — which was eighth on Idealista’s list of most in-demand cities — rents increased by only 5.8% between January 2023 and January 2024, from €9.9 per square metre to €10.5 per square metre.
Idealista has recorded rental demand in the suburban towns outside Madrid and Barcelona — which often maintain higher housing stocks than their urban counterparts — outpacing that of the urban centres for at least the past year.
To help reign in housing costs, the Spanish government passed its Ley de Vivienda in May 2023, which, among other things, directs autonomous communities to declare areas with high rental pressure as “stressed,” which would allow the implementation of rent control measures.
Some cities, like Barcelona, have already been declared as pressure zones.
And throughout Spain, families are spending more on housing each year.
According to the National Statistics Institute’s (INE) 2022 Family Budget Survey, the average spent on housing annually in Spain increased by 3.5% between 2021 and 2022 — from €9,893 to €10,243 per household — and by 2.8% between 2020 and 2021.
And in the four years between 2018 and 2022, the average rental housing expenditure per household increased by 14.7%.
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