PROPERTY SEARCH
The rental crisis: Short-term holiday lets in Spain shoot up while long-term contracts are hard to come by
The country’s new Housing Law has been blamed for worsening the rental situation, making it harder for regular tenants to find permanent homes
According to a new study published by Spanish real estate observer idealista, the number of seasonal tourist rental apartments in Spain has grown in the third quarter of 2023 to reach 10% of all rental homes on the market.
In fact, the growth of this type of rentals has skyrocketed between July and September of this year, coinciding with the period after the approval of the new rental legislation, the ‘Ley de Vivienda’ or Housing Law.
Specifically, the supply of short-term tourist let apartments has increased by 39% in that period, while the number of permanent rental homes has decreased by 1%, accumulating a year-on-year drop of 12%.
This disparity, which makes it harder for people living in Spain to find permanent housing for rent, is being blamed on the recently passed Housing Law because they are not regulated by that legislation, and so they are not affected by, for instance, the limitations on rent updates or extraordinary rental contract extensions that the law covers.
The city in Spain which has the highest proportion of tourist rental apartments is San Sebastián, where 32% of homes for rent offered are on a short-term seasonal basis. This is followed by Barcelona at 28%, then Cádiz (17%), Santander (16%), Málaga (15%), Tarragona (15%), Valencia (13%), Madrid (11%), Alicante (10%) and Girona (10%).
In other cities, meanwhile, this type of property is virtually non-existent, making up barely more than 1% of the market. These are the cities of Albacete, Ciudad Real, Ourense, Logroño, Lleida, Guadalajara, Cáceres, Salamanca, Melilla, Zamora, Valladolid, Badajoz, Teruel, Palencia, Murcia and Segovia.
Among the large markets, the greatest increase in these seasonal rental flats was in Málaga, which has 126% more than a quarter ago, followed by Seville (93%), San Sebastián (55%), Valencia (49%), Alicante (46%), Barcelona (45%) and Bilbao (41%). In Madrid, the supply of temporary rentals has grown by 28% in the last 3 months.
But the largest and most spectacular increases in supply of this type have occurred in small markets where this phenomenon was until now practically non-existent, such as in Huesca (367%), Huelva (292%) or A Coruña (290%). On the contrary, in only two capitals have temporary rentals been reduced during these three months: Zamora (-60%) and Palencia (-12%).
In parallel to these growths, long-term rentals continue to fall since the approval of the Housing Law. In a total of six Spanish provincial capitals, the reduction in available supply has been greater than 10% in this quarter. The biggest drop is in Palma de Mallorca, where supply has been reduced by 19%, followed by Las Palmas de Gran Canaria (-18%), Córdoba (-14%), Oviedo (-14%), Castellón de la Plana ( -12%) and Bilbao (-10%). Among the large markets, supply was also reduced in San Sebastián (-7%), Málaga (-6%), Alicante (-6%), Barcelona (-4%) and Madrid (-3%). Valencia (with a growth of 7%) and Seville (13%) are the only large markets in which the supply of long-term rental homes has increased.
These numbers are also reflected in the year-on-year figures, and this has a serious effect on long-term renters in Spain, who have to fight to be able to rent in a market with significantly reduced supply. It is not unheard of, given this situation, for people to have to rent properties without having seen them first, or giving extraordinary sums upfront as a down payment, or for long-term rental properties to be snapped up as soon as they are listed, for precisely this reason. In turn, the lack of supply coupled with steady demand pushes up prices, meaning renting a home in Spain is becoming more difficult for many ordinary people.
Image: Archive
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