Rent cap shrinks Catalonia’s rental market, study shows – ET RealEstate

MADRID: A Catalan law capping rents in areas with soaring demand, aimed at making the Spanish region’s residential rental market more affordable is having the opposite effect and shrinking it, a study showed on Thursday.

The number of homes available to rent in price-regulated districts dropped 12% from September – when the law took effect – to February, property portal Idealista said in a study of the impact of the law, which it estimates affects more than 90% of Catalonia‘s rental stock.

“The short-term impact is already hurting those who want to rent a property,” Idealista said in a statement. “Tenants will… find far less on offer and prices similar to those before the regulation law.”

Madrid’s rental market increased 2% over the same period while prices fell 3% in the capital region, compared with a 2% fall in the 61 Catalan districts affected by the price controls.

“Exclusively attributing the rental market’s contraction to the rent-containment law could be considered bold and possibly unfounded given the current situation,” a spokeswoman for Catalonia’s Housing department said, adding that Madrid had more tourist accommodation to pass into the residential market than Catalonia.

Associations of landlords and investors have decried Catalonia’s decision to limit rents amid a pandemic-induced downturn, saying it would dissuade people from renting out properties in a region known for attracting both foreign real estate investors and tourists.

As Spain‘s coalition government wrangles over a draft housing law meant to improve the social housing market, some local authorities have opted to pursue their own policies.

The Balearic Islands’ regional government said last week it would expropriate 56 empty properties owned by banks and investment funds in Mallorca, Ibiza and Menorca and turn them into social housing, compensating landlords in exchange. The plan has met with obstacles and caused controversy.

Four more regions including the Basque Country, Canary Islands and Catalonia have passed or are studying laws allowing authorities to convert private properties into social housing if they have been empty for six months to two years.



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Rental supply surges in Madrid and Barcelona – ET RealEstate

MADRID: The number of flats for rent has soared 115% in Madrid and 92% in Barcelona since March, one of Spain‘s largest property portals, Idealista, said on Monday, as tourists vanished from the city centres and some local residents followed suit.

Nationwide, the number of flats advertised for rent soared 63% between March and September, an Idealista spokesman said, as general uncertainty delays people’s decisions and flats left empty during the spring lockdown finally hit the market.

Homes used for short-term holiday rentals had already flooded Spain’s residential market within weeks of the country’s first lockdown in March.

A second influx of properties has followed as locals faced with dwindling income or the possibility of remote work return to their home towns, opt for cheaper flats shared with more people, or move back in with their families, according to several real estate agents interviewed by Reuters.

However, the abundance of properties on the market is not matched by long-term demand, and has not hurt year-on-year price growth, with rents swelling 12% in the third quarter compared to the same period last year, Fotocasa, another major online property portals, said in a statement on Monday.

But rental prices did stumble slightly, Fotocasa noted, dropping 0.7% in the third quarter compared to the second quarter.



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Rent falls in Spanish cities as coronavirus boosts demand for space – ET RealEstate

MADRID: Rental prices in Spain‘s major cities fell in July, data from one of the biggest property portals showed on Tuesday, as the coronavirus pandemic drove up interest in less densely-populated areas.

Between June and July, rents dropped by an average of 2.5% in Barcelona and 1.7% in Madrid, according to Fotocasa, although they remain Spain’s most expensive locations.

“Many Spaniards are considering leaving the big cities and going to live in outlying areas where they can find bigger, brighter and more spacious homes,” said Fotocasa’s communications director Anais Lopez.

Spain imposed one of Europe’s strictest lockdowns in March, confining a population known for spending time in parks and bars to their homes.

While average July rents across Spain ticked down 0.8% from June, they were still 7.9% higher year-on-year, the company said.

Around 17% of renters identified access to outdoor spaces as their main priority in a new property, compared with 11% before the pandemic, Fotocasa found.

Data from rival real estate site Idealista showed a similar trend among prospective property buyers.

“The lockdown and increase of remote working in Spain has led to a shift in housing demand, generating increasing interest in housing in villages with fewer than 5,000 inhabitants,” it said in a statement on Tuesday.

Between January and June the share of people looking for properties in such villages rose from 10.1% to 13.2% of all searches, the company said.



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