Spanish cities where mortgage payments exceed rents

Living in Spain: Rent or buy?

Spanish housing market. Credit: nikkytok/

Is it more cost-effective to rent or buy a home in some of Spain’s most populous cities?

Recent data from December 2023 has shed light on the pros and cons of buying versus renting. In a study by UVE Valuations, based on data from Idealista, a shift in the financial landscape of Spain’s property market has been observed.

As of December 2023, in nine of Spain’s most populous municipalities, including San Sebastian, Marbella, Alcobendas, Pamplona, Cadiz, Palma de Mallorca, A Coruna, Bilbao, and Madrid, homeowners are finding mortgage payments surpassing rental costs. This trend marks a significant shift in the housing market dynamics.

Rising mortgage rates

The study highlights the recent surge in mortgage rates which has dramatically increased the cost of home buying.

While rental prices are also on the rise, the increase is not uniform across different areas. This disparity has altered the traditional balance between renting and buying a home.

German Perez Barrio, the president of UVE Valuations, points out, ‘the fact that the instalments are higher than the rents does not imply that it is better to rent than buy in the long term.’

However, he noted that San Sebastian is a unique case where renting may be more advantageous even in the long run.

This takes into account that the balance between buying and renting is reached when mortgage instalments are around 35 per cent higher than the rents.

Affordable buying options in select cities

Conversely, in twelve cities such as Parla, Cordoba, Algeciras, Murcia, Reus, Badalona, L’Hospitalet de Llobregat, Telde, Alicante, Lleida, Santa Coloma de Gramenet, and Tarragona, the scenario is different.

Here, buying a property with a mortgage appears more beneficial than renting, with the average mortgage payment not even equalling the rent.

This suggests that in these cities, owning a property could be a more economically viable option, considering the long-term wealth generation through property ownership.

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Written by

John Ensor

Originally from Doncaster, Yorkshire, John now lives in Galicia, Northern Spain with his wife Nina. He is passionate about news, music, cycling and animals.