Rental prices fell 8% on average in 2008, whilst the supply of properties for rent surged by 300,000 homes in response to plunging property sales, according to a recent article in the Spanish daily ‘Publico’.
Renting is not popular in Spain, at least when it comes to primary residencies. Just 10% of Spanish families live in rented accommodation says the Ministry of Housing, though other experts say the true figure is 9%, compared to a European average of 40%. But things may be changing in response to Spain’s property crisis, says the article in Publico. Potential buyers can’t get mortgage financing, whilst vendors can’t sell their properties, which creates a common interest in the rental market.
The problem for potential landlords is that they are all doing the same thing at the same time. That means the supply of properties for rent is shooting up, pushing down rental prices. Good news for people looking to rent a place to live, of course.
As usual, the figures available from the government aren’t much use for understanding what is going on. The latest figures from the Ministry of Housing are for 2006, so totally out of date, and they aren’t broken down by region. So Publico went to other sources, such as rental agencies, and found that rental prices fell on average by between 7% and 8% last year, to 747 Euros a month for a property of 75m2.
As always, the average can mask big differences between regions. For example, rents in Ourense province (Galicia) rose by 17% over 12 months to January, and by 8% in Álava, according to figures from enalquiler.com, a Spanish rental property website.
At the other extreme was the city of Valencia, where rents fell by 21%, perhaps thanks to a readjustment in rents after the America’s Cup.