Falling rental prices and shorter lettings are adding more woe to owners of holiday apartments in Spain, many of whom are already struggling with higher mortgage repayments and other costs such as local rates and community fees.
Holiday rental income in Spain is being driven down by a glut of holiday rentals, especially apartments on the coast, coupled with economic belt tightening in both Spain and key tourist markets such as the UK.
“Reality is returning to the holiday rental business,” Carlos Codina, president of a professional tourism association in the Valencian Region, recently told the Spanish press. “Nowadays rents are much more realistic.”
Holiday rental prices are down by as much as 300 Euros per week in some areas of the Costa Blanca, according to research by the Spanish regional daily Las Provincias. “A typical 2-bedroom apartment now rents for 400 Euros per week, compared to 600 to 700 Euros per week last year,” one rental agent in Torrevieja told Las Provincias.
Average lettings are also getting shorter, as people cut holiday costs. “We are getting very few requests for 2 weeks, and now work more by the week,” explained the same source.
Declines have been similar in other areas of the Costa Blanca. In Vinaros weekly holiday rental prices are down by between 150 and 200 Euros, and in Denia and Moraira, there is a good choice of apartments for rent from 300 Euros a week, compared to 600 Euros a week last year. One rental agent reports that demand for tourist lettings in Denia is in “free fall”.
Owners of holiday apartments in Spain are having to drop rents in response to falling occupancy rates, which are down between 20% and 30% in many areas of the Costa Blanca. Average occupancy rates for this summer are expected to be between 60% and 70%. One rental agency in Gandia (Costa Blanca) has seen high season occupancy rates fall from 90% last year to a best case forecast scenario of 70% this year.