The rental price in Spain has increased by 24% in the last year caused by the improvement of employment levels and the lack of savings to access a mortgage loan, according to the idealistic real estate portal, which warns that the uncertainty derived from the political crisis in Catalonia can change the trend in Barcelona, Madrid and, to a lesser extent, in the Valencian Community.
The idealist head of studies, Fernando Encinar, explains that in 2000 renting a flat was “mission impossible” due to high prices and low supply, with less than 9% of the market, while in 2017 Madrid is the third city of the European Union with more rental housing and Barcelona is the sixth.
While waiting for the closing data, idealist figures the rise in the rental price in the last year by 24%, although he points out that it seems that the trend tends to stabilize, as the growth in the third quarter was only 0.5 % quarterly
However, prices evolve very differently depending on the zones. The most relevant year-on-year increases are carried out by non-core markets, such as Las Palmas, Girona, and Málaga, which in 2017 have begun to adjust their prices upwards. Barcelona and Madrid, however, have moderated their rises in 2017 compared to previous years and rose by 5.4% and 10.7%, respectively.
In any case, he points out that large cities have their own micro markets that evolve in a different way, since, for example, renting a house within the M30 in Madrid is, on average, 47% more expensive than doing it outside, where It is still relatively easy to find cheap rentals.
INVESTMENT, NO SPECULATION
According to the real estate portal, the rent phenomenon would not be understood without the determined commitment of small and medium investors who in the last three years have decided to move their savings from their bank accounts to the apartments, after a good investment in the reform, to get them out to the rental market.
In this sense, idealist refers to the “new mantra” by which it is thought that “if it rises it is a bubble” and that any investor is “an evil speculator who will inevitably cause prices to rise like foam”, when in reality ” most of the investors who are currently in the market are savers who have decided that their money, standing in the bank, deserved some gear and they are receiving better returns via rent. ”
Thus, he points out that the profile of the “nervous” investor who bought a home to sell it soon after with large capital gains that proliferated 10-14 years ago has disappeared from the market, while the new investor is “more leisurely, calm and assumes profitability that the rent of the house produces him, without the intention of selling at the moment “.
IMPROVE EMPLOYMENT, RISE RENT
For the idealist, the upward trend that is registering the price of rental housing is not caused by an increase in speculation but by the improvement of employment levels and labor certainty, which has acted as an accelerator of the demand, which at the same time, it is divided into two groups.
Specifically, two-thirds of people who are looking for a rent do so because they do not have the necessary savings to access a mortgage loan, around 30% of the purchase value, according to idealist data. The other third consists of people who have voluntarily chosen the lease, even if they can pay for a purchase, aware of the risks and sacrifices involved in signing a mortgage.
THE UNCERTAINTY OF CATALONIA CAN VARY THE TREND
In view of the economic improvement, explains idealist, the houses that were rented between 2011-2013 in an environment of a deep economic crisis come out now, concluded their contracts, to a “radically different” scenario and their prices awaken from the “hibernation” in the who was there for seven years
This situation, which was beginning to moderate especially in large markets, may change in the fourth quarter, warns the real estate portal, which points out that the Catalan political uncertainty can change the trend not only in Barcelona but also in Madrid and to a lesser extent in the Valencian Community, especially in Valencia and Alicante.
On the one hand, idealist believes that in the Catalan capital many sales transactions that are being delayed or not closed due to lack of funding can encourage the leap to rent pending the clarification of the political landscape, with the influence in prices to the high that it entails.
In Madrid, the influence on the medium-high rental market is still to be seen, which will mean the arrival of management teams and middle managers of the hundreds of companies that have moved their headquarters to Madrid in the last two months. This “disembarkation” is added to the one that has already been produced in the last 18 months since the population in Madrid is growing steadily and pushing rental prices upwards.
“The enormous offer of moment moderates the prices but with the migration that is experiencing the capital, or we increase the houses for rent or I fear that the rental price will continue to rise in Madrid, with the inestimable help of a municipality that refuses to build new homes, which are neither expected nor expected “, added Encinar, who hopes that the” pretty girl “that is now the rent will last, in front of the” ugly duckling “that was for decades.