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It is becoming rather fashionable to describe the dynamics in Spain’s rental markets as exhibiting characteristics of a “bubble”, but close analysis casts doubt on this claim. First, it is necessary to highlight that any analysis of housing market dynamics is restricted both by the limited quality and breadth of available data. Second, while it is true that the financial crisis and subsequent recovery have coincided with a rise in the demand for rental properties, some indicators, such as the rate of severe housing deprivation, in Spain have remained below the EU-28 average, suggesting prices are still relatively affordable. Moreover, there is little empirical evidence to support popular misconceptions as regards the reasons for recent rental price increases, such as the growth of large scale investors as landlords, as well as home sharing platforms. That said, previous public policy measures in this area have failed to adequately address problems in the rental market. Going forward, it will be important to carefully assess the impact of any measures adopted to ensure the incentivisation, rather than restriction, of rental supply, as well as to assess any potential impact on inequality.

García-Montalvo, J. (2019). «The rental market challenge in Spain». SEFO – Spanish Economic and Financial Outlook 8, n.º 2 (marzo): 23-33.