The supply of rental housing continues to decline. And at an accelerated pace. Two new data points that give an idea of ​​how dizzying this fall will be, are added to the indicators released by different organizations over the past few months, which already show a noticeable contraction in the rental stock of apartments and houses. The first of these comes from İdealista, which calculates that the permanent rental stock will decrease by 41% between 2019 and 2024.

The latter, from the Tecnocasa group and the Pompeu Fabra University (UPF), estimates that 24% fewer homes have been added to the rental supply this year than in 2023. Moreover, in some cities this decrease is already around 40%.

What does the data say? The supply of rental housing in Spain is decreasing. So much so that some even talk about its gradual “disappearance”. The latest evidence of this trend is a report by Tecnocasa and UPF that provides devastating data. Experts assure that in the first half of the year the rental housing market added almost 24% less available housing compared to the same period last year.

To be more precise, the study collected by Expansionshows that between January and June, 23.6% fewer new homes were added to the national rental stock compared to 2023. If we go back further and compare it with the 2022 figures, the decline is more pronounced and is around 28%. This is the general picture, of course. If we go into detail and analyze different cities, we find cases like Barcelona, ​​where the supply of new rental homes has fallen by almost 40% (37.4%) annually. The puncture compared to 2022 will be 51.5%.

Supply falls, prices rise. Beyond the percentages in the study, experts note a “significant drop” in the supply of rental apartments, which does not surprise them. “We already predicted this last year, not only in Barcelona but also in cities like Madrid, due to legal uncertainty,” they say Expansion Lázaro Cubero is Tecnocasa’s analysis director.

In addition to the apparent decline in rental supply, the study also shows another clear trend: the rise in housing prices. And it is not the only one. A few days ago, İdealista focused on the rise in rental prices in Spain.

The real estate portal estimates that housing rents have become 13.2% more expensive in the past year. As a result, according to its data, a contract had to be signed at the end of June, assuming an average cost of €13.4/m2. The authors of the report stressed that prices have increased in all capitals, pointing out that the stock “continues to fall” and warned: “The markets are much more intensely highlighted by the decrease in supply and very strong price increases, such as in Valencia, Madrid, Palma or Barcelona”.

41% less in just five yearsIn mid-June, İdealista also left an analysis of the rental market, which if possible included much more brutal data: a 41% collapse in the permanent rental housing stock compared to 2019. complemented by another on demand: between 2020 and 2024, the number of families looking for rental apartments increased by 260% in the same period.

The -41% reflects the decline in permanent rental stock in Spain as a whole. In Madrid, the decline was 59% and in Barcelona, ​​65%. Interestingly, seasonal or room rental stock increased exponentially in the same period. In Barcelona, ​​there was a brutal 220% growth in accommodation offers limited to just a few weeks or months.

A warning (continued)The reports published by Tecnocasa and UPF or İdealista touch on an idea that is not new and that other analyzes have already mentioned: the decline of the supply of rental housing in Spain. In fact, UVE Valuaciones had already presented very similar data in April and along the same lines: its data showed that the supply of rental houses and apartments had fallen by almost 30% in just four years.

Going into detail, the report noted that while there were almost 82,000 offers for tenants in April 2020, this number had not even reached 59,500 by the beginning of 2024. The data shows that the available stock has fallen further from the levels reached during the pandemic, when many landlords, faced with restrictions and the collapse of tourism, chose to transfer homes that they had previously rented to travelers to the housing market. As a result, the housing stock offered to tenants in December 2020 easily exceeded 145,100 homes.

But… What are the reasons? The trend outlined by Tecnocasa, UPF, İdealista or UVE is a complex scenario that is brought about by an increase in the share of the rental market compared to home ownership, an increase in prices or the transfer of apartments to more attractive markets for tourists or home construction, seasonal. Tenants looking for a home also face difficult conditions and fierce competition, which leads to some apartment listings lasting only a few hours on the websites of real estate agencies. In some cities, there are currently more than 100 applicants for each offer.

Despite the sum of these factors, some experts, such as Lázaro Cubero, point out that one of the keys to the contraction in supply is the new Housing Law and the transfer of apartments from the “traditional” rental market to the seasonal market. In this context, the Government has announced that it will take measures to limit the situations in which seasonal contracts can be used and that more and more cities are beginning to control the proliferation of tourist apartments. The clearest example is probably Barcelona, ​​which has proposed the elimination of 10,000.

We are looking for tourist rentals. The Safe Rental Foundation Rental Observatory and Rey Juan Carlos University have published another analysis with a different but equally interesting approach: to what extent could the rental housing stock be strengthened if it were reinforced with apartments currently rented to tourists? . Their response is strong: supply in central Madrid would increase by more than 24%, in Malaga it would increase by 21% and in some areas of Barcelona or San Sebastián the availability of housing would increase by more than 10%.

Image by Arturo Martinez (Unsplash)

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