The pressure on housing prices is spreading like an oil stain across major Spanish cities. This reality is also affecting the rental of rooms. Barcelona once again leads the ranking as the most expensive city in Spain to live in shared housing, with the price of a room reaching 565€ per month, 13% more than a year ago.
There is a reason that explains the upward trend in renting rooms in shared apartments: the fact that many property owners have opted for this route, trying to circumvent in some way the limits imposed by the housing law on long-term rentals. This also means that the supply of rooms for rent instead of full apartments will keep on growing if the legislation does not change.
Despite more rooms entering the market, prices are mostly rising, especially in Cáceres, Badajoz, Ceuta, and Palma, with year-on-year increases between 25% and 27%. As for the most expensive places to live, in addition to Barcelona, Palma and Madrid stand out, where sharing an apartment costs an average of 500€, and San Sebastián 450€.
What effect does the new Housing Law have on the Housing Supply?
This increase in housing supply is due to several measures that have begun to be implemented with the entry into force of the Housing Law.
Firstly, the fact that the minimum duration of lease contracts has been extended; secondly, “the greater protection” against illegal occupations; and finally, the possibility of capping rents, as has been applied since last March in Catalonia in areas considered stressed.
The property owner is afraid and therefore escapes the Urban Leases Law (LAU). They do this by renting out their apartments by the room, a formula governed by the Civil Code, which gives the landlord more leeway to impose their conditions, such as the duration of the contract and the price of the room.
On the other hand, the significant increase in the supply of rooms is happening simultaneously with a rise in demand (+15%), which explains why prices continue to grow.
Shifts in the rental contract lengths
Regarding the government’s claim that some landlords are shifting from long-term to short-term rentals, Chamber President Òscar Gorgues believes this alone wouldn’t explain “the significant drop in contracts.” He does, however, observe an increase in the sale of second-hand properties, possibly driven by landlords withdrawing apartments from the rental market.
Carles Sala, spokesperson for the Association of Real Estate Agents (API) of Catalonia, points out that in recent months, there has been a significant increase in inquiries from private landlords about how to switch from long-term to short-term rentals. Additionally, more and more heirs of properties prefer to sell rather than rent to avoid potential issues. The problem is the lack of rental supply.
Additional High Demand Areas:
The government is taking another step to expand rent price control in Catalonia. The Official State Gazette (BOE) will publish a resolution from the Ministry of Housing on Wednesday, expanding the high-demand area by adding 131 new municipalities to the existing 140. This was a request made by the Catalan government, previously led by Aragonès, which the central government is now implementing. Some of the towns that will be considered high-demand areas from tomorrow include Roses, Cadaqués, Alcanar, Calafell, Peralada, and Santa Eulalia de Ronçana, among others.
Therefore, Catalonia will have 271 municipalities where rent price containment measures will apply. Large property owners and new contracts for homes that have not been on the market for five years will have to limit their prices to the official state index. Price controls will affect a territory where more than 7 million people live, accounting for 90% of the total population of the autonomous community.
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