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The Spanish government is once again intervening in the rental market - with direct consequences for residents on the Costa Blanca. A Real Decreto-ley published in the Official State Gazette (BOE) on 21 March limits the increase in existing rents to a maximum of two per cent with immediate effect. The regulation applies regardless of the size of the landlord and will remain in force until 31 December 2027.
This means that existing or currently expiring rental agreements are subject to the new requirements. The decisive factor is the time of the extension or adjustment - not the conclusion of the original contract.
The decree also provides for the automatic extension of existing tenancies. Contracts that expire in 2026 or 2027 can be continued for up to two years. For tenants, this primarily means short-term stability in a market that has also been under pressure on the Costa Blanca for years.
The development is particularly noticeable in highly sought-after regions between Dénia and Villajoyosa: increasing demand, limited supply and continuously rising prices - both in the purchase and rental segments.
The set upper limit of two per cent is slightly below the current reference value of the National Statistics Institute (INE), whose rent index was most recently around 2.16 per cent. This means that the adjustment deliberately remains below the general price trend.
The government justifies the measure with the tense situation on the housing market and the rising cost of living. Energy prices, inflation and international developments are increasing the pressure on households - even in regions with a high proportion of foreign residents such as the northern Costa Blanca.
The aim is to limit the burden of housing costs. As a guideline, the government has set a maximum rate of around 30 per cent of household income for rent and ancillary costs.
While tenants benefit from more planning certainty in the short term, the discussion about profitability and regulation is intensifying for owners and investors. Particularly in dynamic markets such as the Costa Blanca, this development is likely to have an impact on the supply structure and investment decisions.