Spain rents rise 10% in Madrid as new IRPA caps affect nomad contracts

Spain’s rent cap and market rates

Spain’s rental market is still under pressure, with national average asking rents at €15 per square meter in April, up 5.2% year-over-year. Madrid now tops the list of capital cities at €23.3/m², while Barcelona sits at €22/m², according to Idealista. The agency also says annual updates for qualifying contracts are limited by the Índice de Referencia de Precios de Alquiler (IRPA), which has been running around 2.14% to 2.29%.

The rules matter most for contracts signed after May 2023. Landlords must give 30 days’ notice before an update and in stressed zones new rents can be tied to reference prices under Ley 12/2023. A short-lived decree in March capped some increases at 2%, but Congress repealed it weeks later.

Who feels the squeeze

Digital nomads, expats and long-stay travelers in Madrid and Barcelona are seeing the sharpest pressure, especially where rents are rising 8% to 10% a year and salaries aren't keeping up. Spain’s housing market also shows a heavy concentration of supply, with multi-landlords controlling 61% of rentals and renters making up 20.8% of households.

More than 630,000 contracts are due to expire in 2026, which could affect about 1.6 million renters. Idealista estimates those renewals could mean average annual increases of €1,735.

What renters should check now

Tenants with qualifying contracts should check when their lease was signed and whether it falls under the IRPA update rules. In many cases, the increase is the lower of CPI, core CPI or the adjusted reference rate and any change has to be communicated in advance.

Long-stay renters should also ask whether their home sits in a stressed zone, since that can limit starting rents on new contracts. Deposits still commonly run at 2 months and agency fees can add another month.

Read our full Spain guide for the complete picture.