According to the latest Monthly Rental Price Report by pisos.com, the Canary Islands ranked as the second autonomous community with the sharpest rise in rental costs in January 2025, marking a 21.94% increase compared to the same month in the previous year.
Across Spain, the average rental price reached €12.50 per square metre, representing an 11.41% year-on-year increase and a 2.63% rise compared to December 2024.
Changing Rental Dynamics and Displacement of Tenants
Rising rental prices are driving tenants to reconsider their housing choices. Many renters are now moving to neighbourhoods they initially ruled out due to lack of services, unfamiliarity, or distance from city centres.
According to Ferran Font, director of studies at pisos.com, this economic displacement is reshaping the urban landscape. Central areas are increasingly dominated by short-term and tourist rentals, while rents in suburban areas are exceeding historical averages, with a growing number of properties now being rented by individual rooms rather than entire units.
Font warns that finding affordable rentals has become an arduous task. He suggests that tax incentives could help stabilise prices but stresses that these measures need to be consistent and effective to prevent a resurgence of illegal rental agreements due to legal uncertainties in the market.
Most Expensive and Cheapest Rental Markets in Spain
The highest rental costs per square metre in January 2025 were recorded in:
- Balearic Islands (€18.58)
- Madrid (€18.41)
- Catalonia (€14.69)
On the other end of the spectrum, the most affordable regions for tenants were:
- La Rioja (€4.75)
- Castile and León (€5.31)
- Extremadura (€5.36)
Regional and Provincial Rental Trends
Over the past month, the Balearic Islands saw the largest price hike (3.12%), while no region experienced a decrease in rental costs.
Year-on-year, Asturias recorded the sharpest increase (22.98%), while Navarre was the only region where rental prices dropped (-10.90%).
At the provincial level, the highest rental prices were seen in:
- Balearic Islands (€18.58 per square metre)
- Madrid (€18.41)
- Barcelona (€18.31)
Meanwhile, the most affordable provinces included:
- Ourense (€3.26 per square metre)
- Ávila (€3.48)
- Soria (€3.60)
Santa Cruz de Tenerife: The Fastest Rising Rental Market in Spain
Among all Spanish provinces, Santa Cruz de Tenerife experienced the sharpest monthly rental increase (3.18%), while Soria recorded the most significant decline (-0.28%).
Over the past year, Santa Cruz de Tenerife led the country with a staggering 29.27% increase in rental costs, while Jaén recorded the sharpest decline (-11.09%).
Rental Prices in Spain’s Provincial Capitals
Among Spain’s provincial capitals, the highest rental prices were recorded in:
- Barcelona (€30.24 per square metre)
- Madrid (€24.79)
- Donostia-San Sebastián (€18.32)
Meanwhile, the most affordable provincial capitals included:
- Jaén (€7.10)
- Cuenca (€7.52)
- Ciudad Real (€7.68)
Alicante saw the highest monthly rental increase (3.10%), while Donostia-San Sebastián recorded the most significant drop (-2.52%).
Comparing year-on-year trends, Castellón de la Plana saw the sharpest increase (25.32%), whereas Lleida experienced the largest decline (-2.38%).
The dramatic rise in rental prices in Santa Cruz de Tenerife highlights the growing challenges of affordability in the Canary Islands. The region’s sharp increase in rental demand, combined with a lack of supply, is reshaping its housing market. While some regions remain affordable, the overall trend suggests that finding reasonably priced rentals in Spain is becoming increasingly difficult, especially in high-demand tourist areas.
