For the price of one square metre of housing in Madrid, you can buy almost two in central Mexico City and nearly three in Buenos Aires, Bogotá or São Paulo. But higher property prices do not necessarily mean a heavier burden on local wages.
The key question is how much of their income locals need to spend to afford a home. If you compare rents with wages, the gap shrinks and in some cases even flips.
In the Madrid region, renting an 80-square-metre flat at December 2025 asking prices would have absorbed 71% of the average gross salary advertised on InfoJobs that year, according to a study by Fotocasa and InfoJobs. In Buenos Aires, a two-room apartment comes to almost 80% of an average worker's income. And in parts of the Santiago metropolitan area, anyone on the minimum wage can end up spending between 78% and 96% of their take-home pay on the rent for a small flat.
These measures illustrate the pressure on incomes, although differences in flat sizes, geographical coverage and wage definitions mean they are not directly comparable.
What the 30% benchmark reveals
A commonly used affordability benchmark is to spend no more than 30% of income on rent. Taking Spain's modal salary (the most frequently recorded salary, rather than the average), which was €16,520 in 2024, and dividing it by 12 gives approximately €1,377 a month before tax. Applying that benchmark leaves about €413 a month for rent.
At that price, searches on housing portals found nothing available in Madrid. The closest option was €500 for a flat of barely 30 square metres. The exercise produces virtually the same result in Barcelona. For €500, you can find somewhere noticeably larger than in the national capital, but the search returned just three homes.
How much housing costs in Madrid
Existing homes in Madrid were advertised at an average of €6,471 per square metre in August, according to property website Idealista. This is 2.2% more than a year earlier and below the April peak of €6,619. The slowdown has not reached the cheapest districts: in Villaverde, the borough with the most affordable homes per square metre, prices have jumped 25% in a year.
Rents, meanwhile, show no sign of hitting a ceiling. In September, they set a record of €23.4 per square metre a month, 4.8% more than a year ago. A study by InfoJobs and Fotocasa, comparing advertised salaries with asking rents for an 80-square-metre home, put the cost at 71% of gross pay in the Madrid region in 2025, compared with a national average of 50%.
The Madrid regional government has not designated any “stressed” housing areas under Spain's Housing Act, which allows rent limits in those areas. Other regions, including Catalonia, the Basque Country and Navarre, have used the mechanism. The national government has also sought to intervene. After parliament rejected two housing decrees on 2 October, the cabinet approved replacement measures on 6 October, including rental contract extensions, limits on annual rent increases and protection against evictions for vulnerable households. The new decrees still require parliamentary ratification.
Madrid versus other Spanish cities
Madrid is not the most expensive provincial capital for buying a home, although it is for renting. According to Idealista, in August San Sebastián was more expensive: €6,680 per square metre versus Madrid's €6,471. Behind them came Palma (€5,835) and Barcelona (€5,440). For rentals, Madrid led the way with €23.4 per square metre in September, ahead of Barcelona (€20.1) and Palma (€19.6), while the national average was €15.1.
At the same time, Madrid’s asking house prices rose 2.2% in the year to August, the smallest increase among the cities compared here. Seville (11.5%) and Bilbao (10.6%) recorded the largest increases.
Barcelona, a cap Madrid does not have
Barcelona has been officially designated a stressed housing area since 2024. According to the Catalan Land Institute (Incasòl), the average rent on new contracts was €1,137 a month in the first quarter of 2026, 4.7% less than two years earlier. The latest asking-rent figures also show a contrast: rents in Barcelona fell 0.8% in the year to September, while in Madrid they rose 4.8%.
Supply remains contested. In the first quarter, 8,156 contracts were signed in Barcelona, 17% fewer than in the same period of 2024. The regional government counters that the number of active contracts for regular residential rentals across municipalities with rent caps has increased by 20,994 since the measure was introduced. Idealista's spokesperson argues that advertised supply is falling most sharply in the most heavily regulated markets.
Housing costs still stretch wages across Spain
San Sebastián, the priciest provincial capital for buying, has seen advertised rents fall by 2.5% in a year. In Bilbao, advertised rents are down 0.3%, although sale prices are up 10.6%. The city has been declared a stressed area until October 2028. In Valencia, which, like Madrid, has no declared stressed areas, rents are just 0.5% below their all-time high. Meanwhile, Seville's sale prices, despite a rise of 11.5%, remain 12% below the 2007 peak, when prices reached €3,322 per square metre.
Palma has seen the sharpest rent increase among the cities compared here, with prices up 7.3% to €19.6 per square metre. The Balearic Islands are the most expensive region in which to buy (€5,595 per square metre). Despite these differences, renting remains expensive relative to wages. According to InfoJobs and Fotocasa, renting an 80-square-metre home at the end of 2025 would have absorbed 76% of the average gross salary advertised on InfoJobs in Barcelona province, 72% in Madrid province and 64% in the Balearics.
The housing crisis has become a political flashpoint in Spain, with mass protests in Madrid and elsewhere. The government's response, including the recent decrees, has been contentious, and the issue is likely to feature prominently in the upcoming snap election called by Prime Minister Pedro Sánchez after the parliamentary defeat. As analysts note, the crisis has become an electoral asset for the left, but the underlying affordability problems remain unresolved.
