What is the current state of the rental market in Spain?
Homes to rent in Spain are in increasingly short supply, according to the latest property data.
Many listing portals are showing a significantly reduced number of rental properties available. In fact, across Spain in the first quarter of the year, this was down nearly 40%.
In Granada in particular, the number of properties available to let has fallen by a huge 65% year on year. We’ve seen similar drops across many areas including Seville and Malaga, where there are around 50% fewer houses available to rent compared to this time last year. There were a few areas that bucked the trend, but these were still down up to 10%
Overall, this is seeing a big pressure put on rental prices. There are a number of reasons that this appears to be taking place.
Speaking to a number of landlords who have recently exited the market, one of the main reasons for this is the introduction of both new legislation in terms of rental price caps, but also in the difficulties relating to “okupas” or unauthorised occupiers of properties and the fears about removing occupiers is causing many landlords to exit the long term rental market.
This trend is continuing with the huge reduction in the supply of properties to the rental market and in turn, is creating a large uplift in rental prices with the normal market forces of supply and demand starting to make an impact.
Is there anything that can be done to change this? Well, with the switch to holiday rentals, which provide much more security and better returns for landlords, it’s unlikely that we will see much increase in the supply of rental properties in the near future.
In the local area across Lanjaron or Orgiva and the Lecrin Valley, we’ve seen a very similar position. I
In fact, today, as I write this article, we actually have no long term rental properties available to let. They’re all currently let and there are no new rental properties coming available in the near future.
What does this mean for the local property market?
Well, as is being shown across the national market, this is seeing a big increase in rents when properties become available.
Is this likely to continue into the near future? As far as I can tell, it is looking like it will.
How will that impact the availability of rental properties?.
Speaking to existing landlords, a number are expecting to exit the rental market as soon as their properties become available, and so this could see a continued exodus from the market of long term rental properties in Spain.
Is there anything that can be done to combat this in the short term?
Well, speaking to a number of local landlords who are in the long term rental market. They are all considering either leaving the market altogether or switching to short term holiday rentals. The reasons behind this are generally to do with security, both in rental returns and the fact that rental price caps are now looking like they will be a long term fixture. It’s impossible to cover the costs of ownership and maintenance of properties in many cases, whilst also having the risk of rents not being paid and the difficulty of removing bad tenants.
How this will play out over the next few years is difficult to say at the moment, but it’s certainly worrying times for many people who prefer to rent.
With the potential introduction of a digital nomad visa, this could see more demand with even fewer properties available.
Let’s keep an eye on what’s happening, and don’t forget to keep reading our blogs to see what’s going on in the market.
Don’t hesitate to let us know your thoughts below what you think the future of the local rental market is going.
See more about the local property market here
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