Home » Barcelona rental market shrivels 25pc in two days as Catalan authority clamps down on mid-term contracts

Barcelona rental market shrivels 25pc in two days as Catalan authority clamps down on mid-term contracts

The number of homes for rent in Barcelona has tanked by one quarter in two days since the regional government of Catalonia redefined mid-term rentals as ‘permanent homes’ subject to rent controls, with massive fines for breaking the rules. However, it’s unlikely the new ‘temporary means permanent’ rule will be in force for more than 30 days.

The supply of homes for rent in Barcelona listed at Spain’s biggest property portal Idealista plunged from 4,567 on Wednesday to 3,444 on Friday, an 25pc decline in just two days, which is unheard of in any normal developed rental market, and bad news for anyone looking to rent a home in Barcelona. 

What caused the decline? A new Decree-Law from the regional government of Catalonia, known locally as the Generalitat, which introduces a ‘through the looking-glass’ definition for mid-term / extended stay contracts, known locally as seasonal or temporada rentals. See the Catalan Decree-Law on mid-term / seasonal rentals guide.

The reason the Generalitat is going after temporada rentals is because it recently kneecapped the long-term rental market with rent controls imposed back in March, which motivated landlords to switch to temporada rentals to avoid the onerous costs and restrictions now part and parcel of long-term rentals in Catalonia. The Spanish daily paper El Pais reports that 90pc of new Barcelona rental listings after the law came into force were mid-term rentals, which is a disaster for Catalan society.

Ester Capella i Farré, Catalan Councillor of Territory

To try and force landlords back to the long term market, the Generalitat in the person of Ester Capella (pictured), the regional councillor in charge of housing policy, announced on Wednesday a new Decree-Law redefining the majority of ‘temporary’ rentals as ‘permanent’ and therefore subject to rent controls. It’s a contradictory and sketchy decree from the Generalitat that also contains huge fines of up to 900,000€ for renting a property just 30pc higher than rent control rates. As a results 25pc (and counting) of rental homes in Barcelona have been taken off the market in just two days.

The Generalitat website explains that “leisure, holidays, recreation and cultural events” are valid reasons for temporary rentals, whilst “professional, work, study and medical reasons” are not because they address a “need for permanent housing, albeit on a temporary basis.” Ester Capella labelled the latter a scam (la picaresca).

In other words, under the new rules, only temporary rentals for ‘fun’ (ocio in Spanish) reasons such as holidays will be considered temporary, whilst temporary rentals for reasons such as work, health and education are considered permanent. Renting a holiday-home in Barcelona for six months is fine, but renting student accommodation is not.

So, if you are sent to Barcelona on business for a few months, or need a place to live whilst you or your family receive medical care, or come as a student, or even just need a temporary home whilst you renovate or look for somewhere more permanent, the Generalitat says you are looking for a temporary permanent home. The contradiction in terms is there for all to see. Banning all temporary / mid-term rentals would have been more coherent.

Temporary decree?

The Decree-Law is unlikely to outlast the shortest temporary rental as it has to be approved by a parliamentary committee within 30 days, and it appears that the Generalitat doesn’t have enough votes to get it through after the Socialists and Junts party said they would vote against it. However, with regional elections due on the 12th of May, anything’s possible.

If this new decree does survive beyond the month, will visitors to Catalonia now enjoy cheap rent-controlled temporary rentals as a result? Almost certainly not. Mid-term rentals only make financial and practical sense for landlords if they are free of rent controls and other costs and restrictions imposed by Catalonia’s new rental laws. Although some visitors might benefit from cheaper rents, many more will find nowhere to stay.

If the mid-term rental market withers, where will people like students, business executives, and patients stay for months on end in Barcelona? In hotels? It is more likely that they will simply rule out the Catalan capital and go somewhere else. That would be bad news for the city on many levels.

Will banning temporary rentals make housing more accessible and affordable for locals, as the Generalitat argues? If landlords have abandoned the long-term rental market en masse it’s because the Generalitat pushed them out with perverse incentives. Although most landlords prefer the long-term rental market, many will not go back just because the Generalitat has clamped down on mid-term rentals. Some will sell up, others will look for loopholes, or operate in the shadows. None of this will increase the supply and quality of homes available to locals. The most “vulnerable” have already been shut out of the Catalan rental market by rent controls, and the local authority provides almost no social housing.

But given that you can still rent out a holiday-home in Barcelona on a mid-term basis, I guess we are going to see an explosion of mid-term “holiday-homes” for rent in Barcelona. It’s already started. 

One thought on “Barcelona rental market shrivels 25pc in two days as Catalan authority clamps down on mid-term contracts

  • Mark Stücklin says:

    By the 5th of May the supply of homes for rent in Barcelona advertised at the portal Idealista declined by 39pc to 2,800 as a consequence of this new Decree Law.

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