The Catalan government (Generalitat) has been busy spinning the latest rental market figures as a vindication of its rent control policy—but scratch beneath the surface, and the numbers tell a very different story.

Official spin: “price containment” success

Sílvia Paneque, the Generalitat’s Councillor for Territory, Housing and Ecological Transition, was quick to trumpet the results in the Catalan Parliament this week, citing what she called a “continued trend in price containment.” According to Paneque, there has been a “cumulative 4.9% reduction in Barcelona city and 1.9% across all officially designated stressed market areas since the policy began.” The chart above illustrates the decline in average Barcelona rental prices in H1 (-4.4%).

She also contrasted this with a “6.6% increase” in rents in areas not subject to rent caps (where a fraction of the population lives), arguing that rent controls are clearly working to “defend the right to housing” and rein in “years of excessive speculation.”

It’s a bold pitch. But it’s also a classic case of polishing a turd.

The real numbers: lower supply, not lower prices

While declared rents in official contracts did edge down slightly, asking prices on the open market soared—up over 12% year-on-year in H1 2025. Meanwhile, the number of new rental contracts in Barcelona have continued to tank. Just 15,026 were signed in the first half of 2025, down 15% from last year and over 7,000 below the ten-year average (20% down). The chart above illustrates this precipitous decline.

In Q2 alone, the number of new contracts fell to just 7,411—the lowest level on record (excluding the lockdown period). So yes, a lucky few (with the best rental profiles) are paying marginally less for increasingly scarce rental housing, but many thousands of families are now shut out of the market, even if they can afford to pay the market rate. But hey, fewer homes to rent and more people locked out—apparently that’s what success looks like now.

Rental market index shows dramatic divergence

Using 2015 as a base index (100), we can see how rental supply and prices have evolved over the last decade, taking in Barcelona’s first experiment with rent controls between Q3 2020 and Q1 2022, which coincided with the pandemic, and the lastest experiment starting in Q1 2024.

• €/sqm contract rents: index 153
• Asking prices: index 196
• Rental contracts signed: index 77

The first experiment appeared to restrain rental prices, but in reality that was due to the pandemic, which dragged down prices to the same extent in other cities like Madrid (see next chart), where there were no rent controls in place.

But rent controls sent a clear message to landlords: expect punishment. Many have been leaving the market ever since.

This stark divergence makes it clear: rent controls are strangling supply while doing little to reduce prices.

More homes for rent? A convenient fudge

In a further attempt to salvage the narrative, Paneque pointed to what she claimed was a “positive balance” of 2,285 more rental contracts across Catalonia in Q2 2025 and 14,124 more since the start of the policy. But this figure includes all ongoing rental contracts, not just new ones—so it says little about access for those looking for a home today.

Nor does it square with the hard data from INCASOL showing a steep decline in new contracts being signed in Barcelona, the region’s most important rental market.

Why more rental contracts doesn’t mean better access to housing

The total number of rental contracts can increase even as new contracts decline because rent controls reduce tenant mobility—people stay put to hold onto capped rents, meaning fewer homes turn over and fewer new contracts get signed.

Think of the rental market as a population of rental contracts. The total number of contracts is like the population, and the number of new contracts is like immigration—new entries into the system. Meanwhile, contracts ending or tenants moving out are like emigration—exits from the system.

Here’s the dynamic under rent controls:

• New contracts (immigration) are falling, because there are fewer homes coming onto the market—landlords are less willing to rent under capped prices, and fewer people are moving out.
• Existing tenants are staying put (lower emigration) because they have a good deal and don’t want to lose it. In normal conditions, some of them would move for a job, buy a home, or upsize/downsize, freeing up a rental. Under rent controls, many choose not to move at all.

So even with a sharp fall in new contracts, the net total of active contracts can still rise if fewer people are leaving. That’s how the Generalitat can claim that there are “more contracts than before,” even as new rental opportunities for would-be tenants have collapsed.

But that increase doesn’t reflect better access—it reflects reduced turnover and tighter market stagnation.

Blaming the past, ignoring the present

“The housing crisis,” Paneque said, “is the most visible wound of an economic system that has tolerated excessive speculation.” And while she insisted that the government’s housing strategy is a national priority built on “planning, dialogue and coherence,” the reality on the ground is that rent controls have pushed the market further into dysfunction.

In a high-demand city like Barcelona, the unintended consequences of these regulations—lower supply, longer queues, greater informality—are anything but coherent. While some lucky tenants may enjoy lower rent, thousands of others are locked out entirely, or paying under-the-table to meet the real market price.

No amount of spin can hide the damage

One year on, rent controls in Barcelona have delivered exactly what many warned: a smaller, murkier rental market that helps a few while hurting the rest. And while officials keep dressing it up as success, for most people trying to find a home to rent in Barcelona, it’s mission impossible.

When it comes to pay versus rent, Spaniards don’t have much left at the end of the month compared to most developed countries, according to Deutsche Bank’s latest global city rankings.

Deutsche Bank’s Mapping the World’s Prices 2025 report ranks global cities by average net monthly salary, housing costs, and disposable income after rent — offering a revealing picture of financial comfort across the world’s urban economies.

So how do Spanish cities fare? In short: not brilliantly.

Low pay, middling housing costs

In Figure 21, Monthly Net Salary (after tax), Madrid and Barcelona both sit in the lower half of the European table. Average net pay in Madrid hovers around €2,150 per month, while Barcelona trails slightly at €2,050. That’s roughly half the take-home pay of cities like Zurich, Geneva, or Luxembourg, and about 25–30% below London or Paris.

At first glance, Spain’s relatively lower housing costs (see Figure 22) might seem to balance things out — property prices per square metre are about a third of those in Zurich and half of London’s. But that only tells part of the story.

After rent, little left to spend

Deutsche Bank’s Disposable Income After Rent Index (Figure 24) reveals what people actually have left once housing costs are deducted. Here, Spanish cities fall behind.

In this ranking, Madrid places in the mid-30s worldwide, and Barcelona a few spots lower, well below other European cities with similar living costs. By contrast, Zurich, Luxembourg, and Frankfurt top the list — cities where high salaries comfortably outpace high rents.

In Spain, the opposite dynamic applies: modest salaries and rising rents eat away at disposable income, leaving residents with significantly less money left over for savings, leisure, or consumption.

A squeezed middle

This imbalance shows up clearly when comparing Spanish figures internationally. A worker in Madrid or Barcelona typically spends 40–45% of their net salary on rent, compared with 25–30% in cities like Berlin or Vienna, or even less in Nordic capitals where wages are stronger.

In other words, Spain’s housing costs are not outrageously high by global standards — but salaries are too low to make them feel affordable. The result is a growing “cost-of-living squeeze” that disproportionately affects young professionals and renters.

Spain’s big cities are still cheaper to live in than London, Paris, or Zurich, but when pay packets are factored in, residents are left with less spare cash than most of their European peers.