The Myth of the Vulture Fund in Madrid

The tent city sprawling across Madrid’s Puerta del Sol offers a familiar spectacle of urban discontent. Young activists and struggling tenants assemble under banners decrying corporate greed, pointing their fingers squarely at investment firms, landlords, and short-term rental platforms. The emotional focal point of the movement is the tragic case of an 87-year-old woman, Maricarmen Abascal, whose eviction by an investment firm sparked nationwide outcry before her death in hospital.

It is a narrative tailored perfectly for Spain’s Socialist Prime Minister, Pedro Sánchez. Sánchez recently framed his package of emergency housing interventions as a moral crusade against those who view housing as a speculative asset. When Congress rejected his market controls, Sánchez promptly called a snap election for next month, attempting to convert housing frustration into electoral momentum.

Yet the outraged rhetoric from both the encampments and the government clashes sharply with basic economic arithmetic. According to Bank of Spain figures from 2024, corporate entities and investment funds own a mere 8% of the country’s rental properties. The vast majority of the rental market remains in the hands of individual private owners.

The actual driver of skyrocketing rents—which have surged by an average of 84% nationwide over the last decade, and nearly 150% in coastal markets like Marbella—is a structural failure to build. Between 2021 and 2025, Spain created roughly 1.2 million new households, largely driven by migration. Over the same period, developers constructed fewer than 500,000 new homes. The Bank of Spain estimates a housing shortfall of 750,000 units, a deficit projected to reach one million by 2028. While national statistics highlight nearly four million empty properties, these are overwhelmingly located in depopulated rural areas, trapped in legal inheritance disputes, or unfit for habitation.

Instead of removing legal obstacles and encouraging private construction, public sentiment leans heavily toward further market intervention. Data from the Centre for Sociological Research reveals that 72% of Spaniards support higher taxes on multi-property owners, while 40% favor the outright expropriation of empty homes.

Meanwhile, the core squeeze on working Spaniards stems from state-driven economic stagnation. Real spending power in Spain has fallen by 5% over the past decade, eroded by heavy taxation, social security charges, and inflation. In Madrid, where the average monthly salary stands at €1,550, high rents are less a byproduct of corporate speculation than the predictable outcome of an over-regulated market and a squeezed middle class.

Written by Sandy van Dongen sandy.vandongen@alpineweekly.com