Mark Stücklin
Francisco Iñareta, spokesperson for Spain’s largest property portal Idealista, sharply criticises government housing policies, arguing that they are exacerbating the housing crisis.
In this punchy article (in Spanish) titled ‘Five Years of Bad Decisions‘ published in the Idealista blog, Iñareta argues the Socialist government led by Pedro Sanchez has exacerbated the Spanish housing crisis, in particular higher rental prices and shortages, with misguided interventions culminating in the 2023 Housing Law. The road to housing problems is paved with good intentions.
Key takeaways:
- Government interventions aimed at improving rental affordability have backfired, exacerbating the housing crisis.
- Measures like extending rental contracts and implementing price controls have discouraged landlords, leading to a drastic reduction in available rental properties.
- The shrinking supply has fueled price increases, intensified competition among tenants, and marginalised vulnerable groups.
Declining supply:
The article asserts that the core issue lies in the lack of supply, which has worsened due to policies perceived as hostile towards landlords. This has resulted in a 33% decrease in available rental properties nationwide compared to five years ago. Barcelona and Madrid have experienced even steeper declines, with drops of 75% and 46%, respectively. The author argues:
“The key to the entire rental crisis is the lack of supply, but instead of taking measures to stimulate it, they have focused on persecuting owners, which has caused their departure.”
Soaring prices and increased competition:
The dwindling supply, coupled with consistent or growing demand, has propelled rental prices upwards. Nationwide, rents have climbed by 28%, with Madrid witnessing a 25% surge and Barcelona a 33% increase despite price control measures.
This has intensified competition, with the average number of families vying for each rental listing on idealista rising from 7 in 2019 to 32 in 2024. In Madrid, the number has jumped from 10 to 43, while Barcelona sees a staggering 63 families competing for each property.
Impact on vulnerable groups:
The increased competition has disproportionately affected vulnerable groups and young people. Landlords, faced with a plethora of applicants, naturally favour those perceived as financially stable and less likely to cause complications. This effectively excludes individuals and families already facing financial hardship, exacerbating social inequalities. The author states:
“This runaway increase in demand for each ad not only has the consequence of increasing prices or the situation of anxiety to which it leads many families, but also directly contributes to promoting the exclusion of the most vulnerable and young groups.”
Proposed solutions:
The article advocates for a radical shift in rental policies. Instead of persisting with demonstrably ineffective measures, it suggests reversing harmful interventions and adopting a data-driven approach that balances the interests of both landlords and tenants. This includes consulting with experts and fostering collaboration to create a sustainable and equitable rental market.
Conclusion:
The article paints a stark picture of the Spanish rental market crisis, attributing its deterioration to government interventions that have disincentivised landlords and shrunk supply. The resulting price hikes, heightened competition, and exclusion of vulnerable groups demand a reassessment of current policies and a shift towards evidence-based solutions that prioritise a balanced and inclusive housing ecosystem.
