Two and a half months after the approval of the Housing Law, the market is seeing undesired effects, either because some of its measures are not being effective, or because they have not provided a solution to some existing trends, which is causing the rental offer is scarcer today and a rise in prices. Those most affected by this situation are the vulnerable, families who still do not have access to real estate at an affordable price and, therefore, their expectations for the future are diminished.
Housing was the main economic issue during the municipal and regional election campaign on May 28. The Government, in addition to giving the go-ahead to the first state law after two years of negotiations, announced a block of initiatives to promote the supply of social housing and thus solve the housing deficit, especially serious in cities such as Barcelona or Madrid. Almost a quarter later, the market situation is complex. There is less rental housing stock on offer and prices are reaching maximums. The average price of apartments for rent today is 11.69 euros per square meter; in May 2022 it was 10.89 euros/m2, according to data from Fotocasa. Idealista, for its part, estimates the rise at 9.3% in the first half of 2023.
The problem is not that the owners are violating the obligations of the law. It is an explosive cocktail in which it is mixed that the autonomous communities governed by the PP, up to eleven after 28-M, will not apply the norm, with a market that is circumventing the limitations in force or in the making, withdrawing rental homes to pass them to other more profitable or “safe” modalities.
Industry experts identify five trends in the rental market in recent months. In the first place, a transfer of houses that were rented and that are now for sale. According to the figures of Fotocasa for its advertised ads, the offer has been reduced in Madrid by about 15% and in Barcelona by 20% this year. The owners admit that they decide to part with their properties for different reasons, profitability being an upward reason in 2023.
The real estate market is also experiencing an increase in seasonal rentals, a legal modality that seeks to circumvent the price limitation. “The owners rent their properties for 11 months; It is a loophole that many are going through”, explains Emiliano Bermúdez, deputy director of Donpiso. There is also a transition from residential to tourist rental that, although it is difficult to quantify at this time, all the real estate portals and experts consulted have detected it. Fotocasa explains that in 2023 the number of buyers interested in opting for vacation rentals has doubled. Profitability is once again the main reason. The commitment to shared flats is the fourth trend that the sector identifies; individuals who decide to remove their properties from traditional rental and allocate them to leasing for students, for example. In Barcelona and in the capital, this modality has skyrocketed prices.
Investors talk about a Housing law that generates “legal uncertainty.” They point out that the situation in Catalonia (where the Parliament will vote if it partially appeals the state regulation before the Constitutional Court after the Council of Statutory Guarantees determined that it invades some autonomous powers) is even more delicate because it is the only territory willing to apply all the precepts of the state norm. The Association of Promoters APCE explains that, in addition, there is a reduction in the rate of construction of houses in the autonomy. In the first quarter alone, the latest data available, construction starts fell by 9.2% in year-on-year terms. Promoters prefer to bet on safer places”, points out Arantxa Goenaga, partner of the Círculo Legal law firm. “The Housing Law has well-intentioned measures that end up generating undesired effects and vulnerable groups are the main victims,” says an executive from one of the main developers.
The problem of rent in Spain does not envision a solution. The formulas to promote an affordable housing park announced by the Government have not made progress. Market professionals agree that their bet would be to modify the regulations to grant greater guarantees to the owner. Without legal certainty there will be no investment, and the offer will continue to be insufficient, they conclude.
