Hundreds of protesters have set up tents in Madrid's Puerta del Sol square, demanding government action on Spain's deepening housing crisis. The demonstrations come as Prime Minister Pedro Sánchez has called a snap election after Parliament rejected his emergency housing reform package.

Among those camped in the square is Pierina Nicuray, a 21-year-old university graduate. "It's the same problem as always," she says. "A lack of homes." She adds: "Landlords are taking advantage of the situation to raise rentals, and then there's also Airbnb."

Jorge Moreno, a 19-year-old film-dubbing student also living in a tent in central Madrid, points to investment funds as a key driver of the crisis. "There are so many homes standing empty because they have been bought by vulture funds and investment funds which hike up the rent of people living in properties until they get rid of them," he says. "They've been making a business of housing for a long time. But it's an abusive business which stops Spaniards from being able to live in a decent home."

The protest movement was galvanised by the case of Maricarmen Abascal, an 87-year-old woman evicted from her home after an investment firm that had purchased the property pressured her to leave and then sharply increased her rent, which she could not afford to pay. A public backlash prompted the company to invite Abascal to return, but she never did, dying in hospital shortly afterwards.

Carmen Pérez, a retired widow originally from Ecuador who has lived in Spain for 17 years, describes how rising costs have forced her to move in with her daughter and son-in-law. "When a property is listed to rent, there's always a long waiting list," she says. "And the rent is always too high for me. All of this has affected my health - I've got depression, I don't have any stability or security."

Rental costs across Spain have risen by an average of 84% over the past decade, according to property outlet Idealista. In the centre of Malaga, the increase has reached 113%, while in Marbella it stands at just under 150%.

Housing has become Spaniards' biggest concern. A recent study by the Centre for Sociological Research showed that 72% of respondents wanted higher taxes on those owning ten or more properties, 76% supported limits on short-term tourist accommodation, and 40% backed the expropriation of empty homes.

On presenting his emergency reform package, Socialist Prime Minister Pedro Sanchez said he was legislating "against those who consider housing just another object on the market with which to speculate." Parliament's rejection of those measures, which included tenant protections and rent freezes, prompted him to call a snap election.

Not all analysts share the view that investment funds are the primary cause of rising rents. Jorge Galindo, director at the Esade centre for economic policy, says available data makes it difficult to determine precisely how many Spanish properties are owned by so-called vulture funds and used for speculation. He cites Bank of Spain figures from 2024 showing that only 8% of rental properties are owned by companies.

"When it comes to explaining the rise in rentals, that is not the big cause," Galindo says. "What explains it is the shortage of supply compared to demand over recent years."

The Bank of Spain has estimated that the country faces a housing shortfall of around 750,000 homes. The institution's deputy governor, Soledad Nunez, warned in September that the figure could rise to one million by 2028.

Spain's National Statistics Institute records 3.8 million empty properties across the country, but analysts note that a large proportion of these are located in depopulated rural areas and are therefore of limited relevance to the crisis, which is most acute in urban centres.