Tenants are struggling with rising rental costs
In Spain, the price of rental housing in April once again broke historical records, standing at €11.55/m² per month. This situation, which has been repeating itself since May 2022, has led the price not only to break records, but also to exceed the price recorded during the 2007 real estate bubble, by 14.1%, according to data from Fotocasa. The current average rental price exceeds that recorded 15 years ago, which stood at €10.12/m², when the highest prices in the series were unanimously reached throughout Spain.
“The average rental price has never been so high in Spain. If what was experienced during the bubble of 2007 seemed bulky, now it is more so. It is necessary to highlight that a bubble situation cannot occur in the rental market, since bubbles only occur in the prices of durable assets and in actions that provide long-term income. However, we can refer to the current rental situation as a moment of excess prices when we appreciate how wages have not grown at the same rate as housing, which produces a very substantial risk of inaccessibility to housing“, explained María Matos, spokesperson for Fotocasa.
Autonomous Communities
All the autonomous communities, except Asturias, Aragón and Castilla-La Mancha, presented a price higher than that registered in 2007. In 11 of the 17, the percentage increases reached double digits. In addition, many showed annual increases of more than 50%. They include the Balearic Islands (62.3%) and the Canary Islands (57.3%). And those that show values above 20% increase include Madrid (37.6%), Navarra (32.4%), Valencia (30.8%), Catalonia (26.0%), Castilla y León (25.8%), and Extremadura (21.3%). In Andalucia, prices have increased by 13.1% since 2007.
“The fact that in some regions the rental price is so far from what was presented 15 years ago is very relevant. We see how the most stressed communities are 60%, 50%, 40% or 30% above the previous maximum price, and the most remarkable thing is that this huge gap has developed in just one year. During 2022, most of the autonomies broke a price record by reaching 2007 levels, but they did not stay at that point, but have continued to increase their prices until they significantly exceed those registered in the middle of the bubble“, Matos explained.
Capitals
In 26 of the 27 provincial capitals, the average cost of rental property exceeded those registered in 2007. This means that 96% of the capitals in Spain have reached maximum prices again and present a price higher than that of the 2007/2008 real estate bubble.
The capitals with increases of more than 50% stand out: Malaga capital (61.7%), Las Palmas de Gran Canaria (59.9%), Palma de Mallorca (58.2%). Also those that show increases above 20%: Valencia (45.4%), Barcelona (37.1%), Alicante (36.3%), Ourense (32.4%), Madrid (32.4%), Salamanca (31.9%), León (28%), Huelva (27.1%), A Coruña (26.8%), Santa Cruz de Tenerife (21.6%) and Bilbao (20.2%).
