Protesters blame 'vulture funds' for Spain's housing crisis

Hundreds of demonstrators have set up an encampment in central Madrid to protest escalating rents and a deepening residential crisis across Spain, directing much of their anger at real estate investment groups and short-term tourist lets.

The demonstrations in the capital's Puerta del Sol square come amid severe political fallout. Socialist Prime Minister Pedro Sánchez recently called a snap election for next month after parliament voted down his administration's emergency housing proposals, which sought to curb market speculation.

Public indignation reached a boiling point following the eviction of Maricarmen Abascal, an 87-year-old woman who was pushed out of her home after an investment entity purchased the building and increased the rent beyond what she could afford. Although public outcry led the firm to offer her accommodation back, she died in hospital on Wednesday without returning, turning her situation into a rallying point for demonstrators.

Tenants across the country are grappling with sharp price hikes. Real estate portal Idealista reports that rental costs across Spain surged by an average of 84% over the past decade. Regional increases have been even steeper, with prices in central Málaga climbing 113% and Marbella experiencing a rise of nearly 150%.

Research from the Centre for Sociological Research reflects widespread public frustration. The survey found that 76% of Spaniards favour caps on holiday apartments, 72% support higher tax rates for owners holding ten or more properties, and 40% back the state expropriation of vacant residences.

Economic researchers, however, suggest that corporate purchasing is not the primary driver of the crisis. Jorge Galindo, director at the Esade centre for economic policy, pointed to Bank of Spain figures from 2024 showing that companies own only 8% of the nation's rental stock. Instead, Galindo attributed the rising costs primarily to an acute gap between supply and demand.

The Bank of Spain has calculated an immediate shortfall of roughly 750,000 residential units, a deficit that deputy governor Soledad Núñez warned could expand to one million by 2028. While official figures from the National Statistics Institute record 3.8 million unoccupied dwellings nationwide, most are located in depopulated rural regions rather than high-demand urban centres, with others caught in probate disputes or awaiting repairs.

Between 2021 and 2025, Spain gained roughly 1.2 million new households, largely driven by migration. Construction failed to match that pace, generating fewer than half-a-million new dwellings over the same four-year span. Experts attribute the construction lag to post-financial crisis contraction, post-pandemic spikes in material expenses, and regulatory bottlenecks.

The housing strain is further magnified by wage stagnation. A report by El País revealed that real purchasing power for typical workers has slipped by 5% over the last decade due to inflation, taxes, and social charges. With Madrid's average monthly wage standing at €1,550, residents face severe challenges finding manageable living arrangements.