The price of rental housing rose 7.3% in April compared to the same month last year and 1.2% in month-on-month terms, marking the fourth consecutive record rise so far this year, in a context of supply limited, according to what the real estate portal Fotocasa said on Tuesday.
Although this is the lowest year-on-year increase in the last five months, it is a new record in the average rental price in Spain, at 11.69 euros per square meter, which highlights problems that afflict the Spanish property market .
“This huge increase in price is caused by the great imbalance between supply and demand and this tension pushes the price up,” explained María Matos, director of Studies at Fotocasa.
“The main problem – and that has increased in the last year and a half – is the reduction in the residential rental offer. A very significant volume of properties have been sold, have been converted to tourist rentals or remain empty,” he added. .
He also pointed out that the “existing legal uncertainty in the Housing Law” pushed the owners to other markets.
Last April, the left-wing coalition government in power presented a bill to curb rental prices in high-demand areas and cap annual increases in order to help the most vulnerable groups.
However, the bill did not directly address short-term rentals, and experts feared it could incentivize property owners to do business with tourists and trigger an uncontrolled boom in short-term rentals that further destabilizes the market.
The governor of the Bank of Spain, Pablo Hernández de Cos, sent a warning along the same lines last week, indicating that the government’s plan could give results totally opposite to those expected.
“Economic studies show that price controls can generate adverse effects on the rental supply, both in quantity and quality, so that, ultimately, far from lowering the price of rented housing, it ends up giving rise to higher price levels,” De Cos said in a speech.
In terms of Autonomous Communities, the April report placed Madrid and the Balearic Islands as the most expensive to rent a home, with prices of 16.41 eur/m2 and 16.23 eur/m2 respectively. It is followed by six more communities with prices above €10.00/m2 per month: Catalonia (€15.63/m2 per month), the Basque Country (€14.00/m2 per month), the Canary Islands (€12.27 /m2 per month), Cantabria (€11.35/m2 per month), Comunitat Valenciana (€11.02/m2 per month) and Navarra (€10.99/m2 per month).
(Reporting by José Muñoz; editing by Tomás Cobos)
