Spain's rental market shrinks amid housing law and political standoff

A Idealista report shows that permanent rental listings fell by more than 40% in cities designated as housing‑tension zones, with San Sebastián and Pamplona experiencing the sharpest drops in the second quarter of 2026. Seasonal rentals now account for 29% of the national market and exceed 50% in cities such as Barcelona, indicating a shift by landlords to avoid price caps.

At the same time, the government’s draft housing decree – which would extend rental contracts by two years and contain changes to the land‑law framework – has triggered a political clash. Podemos leaders, including secretary‑general Ione Belarra, warned that the inclusion of land‑law reforms is “a red line” and said the party would block the decree unless those articles are removed. The Basque Nationalist Party (PNV) has also demanded the removal of the land‑law provisions in exchange for its support. The decree is expected to be presented to the Council of Ministers next week, with parliamentary approval required later in the year.