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Both Madrid and Barcelona have had a housing bubble ‘for the past two years’ – but what’s been driving it?

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SPAIN’S two largest cities have been gripped by a dangerous housing bubble since 2023, according to a new academic study that warns of ‘overheating’ in the property market.

Research conducted by three university professors has identified speculative investment and tourism as key drivers behind soaring prices in both Madrid and Barcelona, with rental markets bearing the brunt of the crisis.

The study, titled The Housing Classic: Bubbles in Madrid and Barcelona’s Real Estate Market, was compiled by economics professors from the University of Barcelona, Complutense University of Madrid, and University College Dublin.

READ MORE: Madrid vs Barcelona: Two titanic cities being squeezed in the grip of Spain’s housing crisis

The academics found that both capitals have experienced persistent market imbalances driven by population growth from immigration and a chronic shortage of housing construction.

In Barcelona, researchers identified three distinct bubble phases in the rental market: July 2015 to February 2016, June 2016 to December 2017, and most critically, from August 2023 to the present day.

The study highlights how housing prices have risen far more rapidly than rental prices, creating ideal conditions for speculative investors to swoop in. 

These investment funds and wealthy individuals – both often from abroad – are now competing directly with ordinary families for properties.

READ MORE: Thousands of British and American tourists descend on Andalucian town vying to be new cruise ship capital

According to Enric Aragonès from the Tenants’ Union (Sindicat de Llogateres), buying a home now requires more than seven years’ full salary – the highest amount since the 2008 mortgage crisis. 

Perhaps more strikingly, 60% of home purchases are now made without mortgages, whilst over half of Barcelona’s property transactions involve owners with eight or more apartments.

Tourism has played a significant role in driving demand, particularly in rental markets where immigrant populations are most present. 

The constant pressure from tourist arrivals has created sustained upward pressure on prices, whilst housing supply has failed to keep pace with demand.

READ MORE: Malaga continues to hand out new tourist apartment permits despite housing backlash

The researchers warn that speculative investors who acquire properties purely for profit rather than personal use are ‘reinforcing the risk of market overheating’.

This dynamic has been particularly noticeable over the past two years as credit prices have fallen and speculative capital has flooded into Spanish property markets.

Recent events have highlighted the scale of the problem. 

Residents from six Barcelona apartment blocks recently organised protests against Vandor, a listed investment company that has acquired 14 buildings containing 200 apartments in the Catalan capital. Tenants claim the company is systematically evicting residents to convert properties into student co-living units.

The Tenants’ Union is calling for a ban on speculative apartment purchases, particularly in stressed areas, alongside expanded public housing provision. 

READ MORE: Pedro Sanchez’s proposed Spanish housing law is a timebomb – and he knows it

Currently, Catalonia’s public housing stock sits below 2%, despite regional regulations requiring a minimum of 15% by 2027.

Aragonès argues that rental price controls, similar to those already implemented in Catalonia, should be extended to tourist and seasonal apartments. 

The union advocates for a comprehensive approach combining price limits, speculation bans, and expanded public housing provision.

The study’s authors, meanwhile, recommend prioritising the rental market, where current tensions are most acute and ultimately impact the broader sales market. 

They suggest that social rental housing promotion could act as a buffer against speculative pressure.

READ MORE: Sevilla students feeling the crush of Spain’s housing crisis

As complementary measures, the researchers propose policies encouraging mobility to lower-density areas through improved transport, services, and infrastructure. 

Such initiatives could reduce demand pressure in stressed markets like Madrid and Barcelona, potentially curbing the dynamics that fuel property bubbles.

The findings come as Spain grapples with a housing affordability crisis that has sparked protests and political debate across the country. 

With both rental and purchase markets under severe strain, the research adds academic weight to calls for urgent policy intervention to address what many see as an unsustainable situation.

Click here to read more Madrid News from The Olive Press.

Barcelona

Two Missing After Red Alert Storms Cause Flooding In Catalunya And Shut Down Barcelona – Olive Press News Spain

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SEVERAL Spanish tourist hotspots battled severe floods and thunderstorms over the weekend, with roads turning into rivers.

The military deployed a disaster relief unit to the northeastern city of Zaragoza after intense storms caused flooding across the province.

They worked to drain the excess water and install roadblocks to prevent further flooding.

READ MORE: Red weather warning in Spain’s Catalunya: Emergency phone alert issued with DANA set to bring torrential rain

In Barcelona, a hospital was forced to close because of flooding caused by heavy rain lashing the Catalonian capital on Saturday.

Two people were reported missing from the town of Cubelles, with a witness claiming to see a woman and child fall into the Foix River and being swept away in the floodwaters. 

Rescue workers are continuing the search.

“I’ve never seen anything like this in Cubelles,” Cubelles town mayor Rosa Montserrat Fonoll told Catalan News. The flow of water reached 7,070 cubic feet per second through the town.

At the peak of the storm, emergency services received 1,200 calls in the town. Some residents remain without electricity or running water.

Spanish weather agency AEMET had warned that there was high potential for flash floods in eight provinces Barcelona, Teruel and Zaragoza, Huesca, Girona, Lleida and Tarragona, and Castellón.

The agency recorded nearly 3,200 lightning strikes in Barcelona on Saturday alone, with the Tibidabo amusement park and Park Güell closed. There was also a swimming ban on public beaches.

The storm was caused by a weather phenomenon known as Dana, which is an isolated depression at high levels, caused by a mass of cold air colliding with a mass of warm air over the Mediterranean sea.

READ MORE:  Spanish weather expert slams ‘terrifying’ online backlash from ‘horde of partisans who no longer believe in scientific data’

Click here to read more Catalunya News from The Olive Press.

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Lamine Yamal Shocks At His ‘gangster-Themed’ 18th Birthday In Barcelona By Hiring ‘dwarf Entertainers’ – Olive Press News Spain

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FC BARCELONA winger Lamine Yamal has been slammed for hiring people with dwarfism for his 18th birthday ‘gangster’ theme party over the weekend.

The Association of People with Achondroplasia and Other Skeletal Dysplasias with Dwarfism (ADEE) claims that short-statured people were deliberately hired for ‘show’ in a move that ‘feeds stereotypes’ and violates the law.

They say they plan to take ‘legal and social’ action over the matter.

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Some footage emerged of Yamal and other guests singing with Dominican DJ and rapper, Chimbala. who is a major Latin American artist and is of small stature.

ADEE did not go into exact details over what caused it offence but its president, Carolina Puente, said: “Our dignity and rights are not entertainment for anyone, under any circumstances.”

“When a person with social influence resorts to this type of practice, the damage is even greater- especially among young people,” she added.

Yamal dined with his family and friends at a Barcelona restaurant on Saturday and then rented a finca for a party, which costs around €40,000 per week to hire.

Around 200 guests attended with a large security presence and even drones for a ‘gangster’ themed party.

Broadcaster TVE said that drones were deployed in a security operation and all of the guests had to handover their mobile phones.

Lamine Yamal dressed up as a mafia figure with the celebrations running until around 6am on Sunday.

The guest list included a mixture of footballers, pop singers, and social media influences, along with content creators.

There was further controversy afterwards when Yamal posted a social media video featuring him in a car leaving the venue but not wearing a seatbelt.

Yamal reportedly joined his Barcelona teammates for a training session later on Sunday.

Click here to read more Celebrity News from The Olive Press.

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Rescue Teams In Barcelona Search For Two People Swept Away By River

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River Foix in Barcelona overflowed on Saturday, dragging two people that are still allegedly missing | Credit: @agnosticwaylife on X

Rescue teams from three different Barcelona corporations in Cubelles resumed on Sunday the search for two people, a mother and her child, who were swept away yesterday by the River Foix as it roared through the town due to torrential rains.

A massive storm battered the western Spanish communities of Aragon, Catalonia and Valencia on Saturday, when at about 8:30 pm a person called 112 emergency services claiming he had witnessed how the river currents had dragged away the mother and her child.

However, according to Rosa M. Fonoll, the Mayor of Cubelles, there are no reports of missing persons in her locality. But the Catalonia Minister of the Interior,  Núria Parlon, spoke with reporters this Sunday and confirmed that the missing persons are a woman and a child, according to an ABC report.

The Foix Reservoir floodgates

Although it has not been linked to the disappearance, several news outlets have highlighted the fact that the Catalan Water Agency opened the Foix Reservoir floodgates on Saturday, while Civil Protection sent an alert message to Cubelles’ residents via cell phones, warning them not to approach rivers or streams because of sudden water level rises.

Fire department personnel were working in the area where the alleged disappearance occurred, attempting to control the landslide. In a video posted on X by “A pie de Calle”, massive flows of muddy water are seen spilling onto the streets of Cubelles.

According to the witness, two people were crossing the Foix River on a wooden footbridge near its mouth. The bridge presumably collapsed due to the river’s current, and the two were swept away. In response to the call, firefighters began searching throughout the evening and into dawn, scouring the stream from the last point where the two persons were seen.

Parlon visited Cubelles to supervise the rescue teams. She said that approximately 70 firefighters were deployed to work on “the possible disappearance of the two people” in the Barcelona town and has indicated that “the search will continue for the next few hours.”

Torrential rains affected train schedules and a hospital

However, the local fire chief, Ricard Costa, said the rescue efforts might continue for a few more days. He also said his team is basing the search on the assumption that the two people were swept “by the current in the direction of the river” and were last seen “170 metres from the coastline. We are focusing our efforts from a little further upstream to the mouth of the river and 500 metres beyond the coastline and two kilometres of beach.”

The rains caused flooding in many homes and buildings, including the Alto Penedes Regional Hospital in Vilagranca del Penedés, which will remain closed for several weeks. Seventy-one people who were in the hospital at the time of the flooding were transferred to other medical centres.

The heavy water downpour also caused train cancellations of trains departing and arriving in Barcelona’s Sants Station, where the Red Cross had to assist about 150 people who were forced to spend the night at the station, RTVE reported.

Catalonia, which was on red alert this Saturday due to heavy rain, woke up to better, sunnier weather this Sunday.

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