Rent Prices Drop in Catalonia: Impact of New Legislation and Long-Term Outlook

Rental prices in Catalonia have dropped following the first year of the region’s rent control law. According to Catalan News, prices fell by an average of 3.7% in 140 municipalities and by 6.4% in Barcelona. Catalonia is the first region in Spain to implement strict rent cap regulations aimed at improving housing affordability.

Rent Cap Law: First Results

The rent cap law came into force in March 2024 and applies to “tensed housing zones,” covering areas where approximately 80% of Catalonia’s population lives. In these zones, rent cannot exceed the level stated in contracts signed within the last five years.

For large landlords (owning five or more properties), rents must match or be lower than a government-determined reference index, which reflects the average market price for similar housing in the area. In case of discrepancy, the lower value applies.

Catalan Minister of Housing, Sílvia Paneque, said the law has helped stabilize the market and offered hope for tenants. Around 1,000 new rental agreements are signed monthly. The average cost of new contracts decreased by 1.6% in Q4 2024 compared to the previous year and by 3.3% compared to early 2024.

Barcelona’s Response: Long-Term Structural Change

Barcelona Mayor Jaume Collboni affirmed that the housing law is working. He emphasized that it is not a temporary PR measure, but a structural change designed to support long-term residents, especially young families. He also called for transforming the temporary mechanism into a long-term legal framework.

However, not all market participants are supportive. Idealista, a leading property platform, claims that rental supply in Barcelona has fallen by 84% in the past five years, while prices have surged by 62%. The company blames "punitive measures against property owners" for the “dramatic disappearance” of listings. In response, Collboni called private platform data biased, stating that “official statistics from regional authorities are more reliable.”

Phasing Out Short-Term Rentals

In addition to long-term rent control, Barcelona is planning to phase out short-term tourist rentals by 2028. A gradual ban will be implemented through non-renewal of current licenses and prohibition of new ones. The Spanish Supreme Court has already dismissed legal appeals from landlords and upheld the city’s initiative.

The goal is to release over 10,000 housing units back into the long-term rental market and relieve pressure caused by surging tourism. In 2023, Barcelona saw 94 million visits — an all-time high.

Tourist Tax Increase

To further manage tourism impact, the city plans to double the tourist tax in 2025 to €15 per night per person. This follows a previous increase in autumn 2024 from €3.25 to €7.50 for five-star hotels.

Market Reactions and Legal Debate

The policy package triggered mixed reactions. The Barcelona Tourist Apartment Association (APARTUR) warned of increased poverty, unemployment, and black-market rentals. Girona's equivalent organization (ATA) expressed concern for foreign investors who had bought properties for rental income.

Conversely, the hotel sector welcomed the changes. There are also ongoing national-level discussions about potential restrictions on foreign property buyers, including proposals for a 100% transaction tax or a full ban for non-EU citizens.

Carmen Arcarazo of the Tenants’ Union called the legislation a “turning point after years of market dominance.” She urged the government to enforce the law through inspections and penalties.

Catalonia as a Testing Ground

Catalonia’s rental regulation offers early signs of effectiveness: falling rents, rising rental activity, and the beginning of structural market reform. However, assessments remain polarized — from municipal and tenant support to opposition from real estate platforms and investors.

The long-term success will depend on transparency, enforcement, and balancing interests. Experts caution that stricter regulations may reduce the region’s appeal to investors, particularly from abroad.