Renting houses and apartments in Spain is becoming more and more expensive. Today it is at an all-time high. In cities such as Barcelona, apartments have gone up by 25% in annual terms. Many Spanish citizens believe that living in Barcelona now is already a luxury. Why is this happening? Partly because demand is growing in a market where the supply shortage has not been solved and will not be solved in the foreseeable future.
According to real estate agents, another reason may be the growth of the labor market. This is partly also a problem of growing demand, but related to more fundamental trends in the economy. The number of able-bodied people is not decreasing, the number of employees is growing and more and more people are arriving in large cities to work. The economy needs these people, but the real estate market is not ready to accept them. Miguel Angel Romero, manager of Fincas San Andrés, points out that it should be noted that people are already coming to work in Spain from outside the country.
An extremely high increase in rental rates is also noticeable in Andalusia. It is most pronounced in Malaga, where growth for the year reached 22.4%. The largest growth indicator among other cities in the region. It is worth noting a curious situation that in the center of Malaga there is much more housing for rent than people who live in this area. About 4,260 people live in it. This is one of the reasons for the growth of demand specifically in this city, since such housing stock attracts a sufficient number of foreign consumers.
Thanks to local and foreign demand, Malaga ranks sixth in the most expensive rental in Spain, second only to the largest cities like Madrid, Barcelona and San Sebastian. Some people have to spend up to 6 months searching for an apartment in these cities, the cost of renting which they can afford. 800 euros per month is already an extremely rare offer in local markets. The market is chaotic and the supply of small apartments and studios is depleted.
An increase in interest rates has an impact on lending. Prices for the purchase of real estate are already prohibitive. Borrowed funds from banks are extremely expensive and it is quite difficult to get them now. In view of this, the average consumer begins to migrate en masse to the rental market, which is cheaper in terms of costs in the short term. However, the rental market was not ready for such an increase in demand, so it is actively following in the footsteps of the housing segment for purchase. Spaniards have to compete both with each other and with an inexhaustible influx of foreign tourists and future expats.
Interestingly, high rates in some areas are already leading to a decline in consumer demand and prices. For example, sales in Cordoba fell by 6%, according to Idealista. The imbalance of supply and demand has raised housing costs too high for the local population to afford it.