The Spanish government on Tuesday approved measures including a ban on evictions until 2030 and the automatic renewal of tenant contracts following days of nationwide housing protests.
But the measures hang in the balance as the left-wing coalition lacks a majority in a heavily fragmented parliament, which is due to vote on them on Friday.
Unaffordable housing has been a running sore for years in Spain, but last Wednesday's eviction of 87-year-old Madrid pensioner Maricarmen Abascal sparked national uproar.
Demonstrators have set up around 100 tents in Madrid's emblematic Puerta del Sol square since Saturday night, while tens of thousands of people have protested across the country.
The Socialist-led government raced to finalise a deal with far-left coalition partners Sumar at a key cabinet meeting on Tuesday.
Socialist Housing Minister Isabel Rodriguez told a press conference the measures were "an agreement of huge social significance" that tackled "the main problem of Spaniards".
Rodriguez said the package would "halt speculative purchases" by funds to stop them from "continuing to market an essential asset", without detailing how such companies would be identified.
Residents often blame investment funds -- labelled "vulture funds" by detractors -- and short-term tourist rentals such as Airbnb for driving up rents and squeezing the housing supply.
The measures also include new regulation for seasonal rents and the renting of rooms.
Sumar's Health Minister Monica Garcia hailed the protesters for making the government measures possible, saying on social media that what had been achieved was "unimaginable a month ago".
Socialist Justice Minister Felix Bolanos added on X: "Today is a great day for tenants and small homeowners. And a bad one for speculators."
The halt to evictions and the support for open-ended rental contracts were key demands of the tenants' unions who have spearheaded the protests.
But Valeria Racu, a spokeswoman for the Madrid Tenants' Union, said "this has only just begun", calling for more protests across Spain next weekend.
Beyond Sol square, a bustling hub full of tourists and commuters, Spanish media reported that smaller encampments had also mushroomed in the southern cities of Seville and Malaga.
Guillermo Mendez, who had travelled hundreds of kilometres from the northern region of Asturias to join the Madrid camp, said only "structural changes will change things".
"It has to be something on a national scale, general strikes, protests," the 40-year-old tourist guide told AFP from his green tent.
Abascal, who was evicted on a stretcher from her Madrid home of 70 years, has become a symbol of popular anger at runaway housing prices and a lack of tenant protections.
A deal was announced on Monday for her to return after negotiations with the real estate firm that owned her apartment, which the Madrid Tenants' Union said hiked her monthly rent by 275 percent to 2,650 euros ($3,000).
Mendez said it was "great" Abascal's case had been resolved, but added: "it's a plaster on a huge wound that the economy and society of this country are suffering."
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