A protest against overtourism and housing prices on the island of Mallorca in July, 2024.
AFP via Getty Images
Spain is grappling with a severe housing crisis fueled by overtourism, short-term rentals, and foreign property investments. In response, the government has taken bold steps, including ending its golden visa program, removing over 65,000 illegal Airbnb listings, and proposing a 100% tax on foreign property buyers. With an intention to welcome 1 million foreign workers over the next three years, the plan to solve Spain’s overtourism issues has never been more prescient.
Spain Overtourism Leads To Removal Of 65,000 Airbnb Listings
Spain’s Consumer Rights Ministry ordered the removal of over 65,000 Airbnb listings, aiming to curb overtourism and protect housing for residents.
The government stated that these listings violated short-term rental rules, including the use of missing or fake license numbers and unclear ownership details. After Airbnb appealed the decision, it was up to the High Court in Madrid to take the final decision, and it sided with the government. As of November 2024, approximately 321,000 homes in Spain held holiday rental licenses, representing a 15% increase from four years earlier.
The Spanish government is increasingly attempting to balance tourism benefits with housing needs, with plans such as Barcelona’s initiative to ban all 10,000 of its short-term rentals by 2028, ensuring that residents can find affordable housing.
Many of Spain’s short-term rentals are in popular tourist destinations such as Madrid, Andalusia, Catalonia, Valencia, the Basque Country, and the Balearic Islands. These are places where locals conducted protests last year against reduced housing availability and rising rents, which have increased by 80% over the past decade in some areas. The move reflects broader European trends as countries grapple with rising rents and housing shortages.
Several groups of European activists are intending to protest across the European Union on 15 June. This is a coordinated day that they deem necessary due to the urgent need to limit the growth of tourism, as evidenced by rising rents, housing shortages, pollution, and overcrowded public transportation.
Spain Overtourism: Is Housing Supply The Real Issue?
Airbnb released a statement to say that it would continue its appeal. It believes that housing supply is the real issue and the cause of residents being unable to find affordable accommodation. It said, “The solution is to build more homes—anything else is a distraction.”
Airbnb is correct in that there is a considerable shortfall of available accommodation for residents—the Bank of Spain estimates that 1.5 million social rental dwellings are needed to meet EU housing standards in the country.
The same is true in other European countries. For example, the U.K. Prime Minister cleared barriers to housebuilding this week, a move that comes after homebuilding has been in decline since the 1960s. His government hopes to reach its target of building 1.5 million new homes over the next five years, as per Bloomberg.
Spain Overtourism: Digital Nomads And Spain Golden Visa Has Exacerbated The Housing Crisis
In Spain, the proliferation of real estate investors has exacerbated the situation as has the rise of digital nomads using Spain as a base, leading landlords to favor short-term tenants over longer-term tenants who are more protected.
The rise in rents is one of the main reasons that Spain recently ended its golden visa program. Spain’s investor visa required a minimum property investment of €500,000 (approximately $523,000), after which investors could obtain a three-year residency. Spanish Prime Minister Pedro Sánchez highlighted that the vast majority—94%—of these visas were granted in connection with real estate investments in already strained housing markets, such as Madrid and Barcelona.
The Prime Minister, Sánchez, is also seeking to prevent foreign buyers from purchasing properties, introducing a 100% real estate tax on any properties bought. Sanchez said that foreign buyers were snapping up real estate in tourist locations; in 2023, for instance, British buyers bought one-fifth of all purchases. This tax is part of a larger bill to improve housing market accessibility for residents, including taxing short-term rental and penalizing owners that leave homes empty.
Spain’s housing crisis highlights the delicate balance between tourism and residents, particularly in popular tourist destinations. By cracking down on illegal short-term rentals and introducing taxes on foreign buyers, the government is attempting to prioritize affordable housing for locals.
With the news that Spain is bucking EU trends and intending to welcome 1 million immigrants, including the regularisation of undocumented foreign workers, over the next three years, the intention to solve the affordable housing crisis for Spanish residents couldn’t be any more timely.