Spain has lost a third of rental housing stock in six months

What has happened? A study carried out by the National Federation of Real Estate Associations (FAI) showed that the rental housing stock in Spain has fallen by 30.5% over the past six months. This is pushing demand and prices further in a country with already low level of affordable housing.

The reasons. The reason for the inequality between the supply and demand on the market is the country's Housing Law, which came into force at the end of May 2023. It contains about 10 measures designed to improve the lack of affordable housing.

Specifically, it caps rent increases at 3%, extends the process for evictions of tenants for nonpayment of rent, and allows for greater government intervention in areas where the housing market is considered "stressed."

The consequences. The FAI research has shown that the demand for long-term rental properties has increased by 11% between late May and mid-October, with rental prices have increased on average by 9.2% over the past 12 months.

At the same time, since the new Housing Law went on the books in late May, rental management operations in real estate agencies have fallen by almost 29%.

The FAI also found that 25.8% of agencies consulted in the survey said landlords were tightening requirements for potential tenants, while 19.7% had decided to increase income requirements due to the risk of non-payment. In addition, 15.4% of agencies responded that property owners are moving their homes to the temporary rental market, and more than 13% are putting their properties for sale.

Other consequences include the withdrawal of rental properties from the market after the current contract expires and the transfer of residential rentals to the tourist rental market. 

Regarding the behavior of tenants, 40.6% of the agencies indicated that the demand for regular home rentals has increased, 20.7% of agencies saw a demand for room rentals increase, and 10.1% perceive that interest in buying a home has increased.

Quote. José Maria Alfaro, president of the FAI, said: “It is a true social drama that administrations do not know how to manage.”

Source: The European Conservative

Photo by José Luis Rodríguez Martínez on Unsplash

Quoting conditions of Prian.info materials