Renting a holiday apartment this August on the beach in Spain will work on 10% cheaper on average than last year, according to data from real estate consultants Tecnitasa.
Prices are being driven lower by an over-supply of holiday rentals, as developers, investors, and banks try to rent out the properties they can’t sell. Prices are down the most in areas where the glut of unsold homes is biggest. “In some areas the oversupply is spectacular,” a director of Tecnitasa told the Spanish press.
The biggest discounts are reported to be in Playa Arenal, Palma de Mallorca, where flats can be rented for 40% less than last year. Other areas with big discounts on holiday lettings are Almuñecar, Granda Province – Costa Tropical (-25%), Vinaros on the Costa Azahar (-21%), Chiclana in Cadiz (-20%), Ciutadella de Menorca (-17%), Torrevieja and Alicante (-17%), and Murcia (-15%).
Rents in some of the most sought after places appear to have held their ground, with holiday rents the same or very slightly down in Marbella, Puerto Banus and Fuengirola in Andalucia, and Sitges in Catalonia. Prices have even risen in some places, like El Puerto de Santa Maria, in Cadiz, up 12%.
The economic crisis is encouraging families to seek cheaper alternatives to hotels, which stopped rental prices falling further in August. Rental prices may be down on average in August, but they are said to be holding up better than other summer months, as hard pressed families take shorter holidays. Whilst the best locations are expected to get 95% occupancy in August (down to 75% in less popular areas), occupancy is expected to be down significantly in July and September.
Shorter average bookings also mean higher running costs for owners, which will reduce net yields.
According to Tecnitasa, renting a flat on the beach for the month of August costs around 1,000 Euros in places like Almuñecar and Torrevieja, 4,500 Euros in Soller (Mallorca), 5,000 Euros in La Linea (Cadiz) and Cala d’en Blanes (Menorca), and as much as 9,000 Euros in the Marina at Sotogrande.