In the aftermath of 13-O, when the rent strike drums sounded as if they had not been heard for a century, the Bank of Spain decided to publish a detailed analysis of how the sector was structured in the country. And it leaves a few data for reflection. Beyond the myths about vulture funds or investment companies, for example, the majority of houses available for rent in Spain are owned by individuals. Especially small owners.

This is not the only message the organism sends.

Who rents in Spain? According to the latest sector report from the Bank of Spain (BE), the answer is quite clear: individuals. They constitute the majority and have become more relevant in the market over the years. To be more precise, the agency estimates that at least in 2021, more than 90% of properties rented as regular homes and at market prices are in the hands of individuals. Companies owned 8% of the park.

And this is the national average. The weight of legal entities in residential rental is much lower in regions such as Asturias (4.3%), Balearic Islands (4.7%), Castilla y León (5%), Extremadura (2.6%), Galicia (3.8%) . Murcia (5.4%), to give a few examples. In the Canary Islands, Madrid and Catalonia, this figure is above average, ranging between 9.1 and 11.1%. Broadly speaking, BE describes a residential rental market that is “dominated by individuals who are not large landlords.”

Four of these are taken from the Bank of Spain’s latest sector report.

So what are these homemade ones like? Another conclusion can be drawn from the BE report: The majority of individuals who own apartments for rent are also small homeowners. Although its dominance in the market is largely explained by the “high profitability” offered by renting compared to other investment alternatives, the truth is that there are not many land owners. There are, but they are in the minority. The business acknowledges that the Spanish rental market is one where “property is not concentrated and small property owners stand out.”

“Calculations with administrative data for 2021 reveal the total number of rental houses whose owner is a natural person who owns more than ten houses with a maximum of 7% of the market rental stock in the common financial district,” the supervisory banking said. And not only that.

“Modest weight”. The BE report notes that the “modest relative weight” of companies in the residential rental market is generalized in all autonomous communities and makes Spain stand out among Europe’s major economies, where financial institutions, insurance companies, funds and Socimi own. “more weight” in the market. He goes so far as to say that a greater presence of these “professional agents” would result in “lower risk premiums and the impact of operating and tax costs on rental prices.”

“A serious increase”. These aren’t the only ideas or percentages left out by the organisation, which has seen a “significant increase” in the stock of rental housing held by individuals over the past decade. And as one figure is more than a long explanation, BE says its stock will increase by around 100,000 homes per year between 2012 and 2022.

The data corresponds to properties rented for tenant use as permanent residence, a market in which the “relative weight” of individuals is increasing. Moreover, BE itself acknowledges that this trend has not been accompanied by an increase in public investment in social renting.

Tables are taken from the latest sectoral report of the Bank of Spain.

What about tourist apartments? The report also sheds light on the holiday rental market, which has focused the attention of municipal councils in different regions of Spain in recent months, especially in tourist centres. What is the outcome of BE? The market is “unified” with an uneven footprint across the region. When we look at the country as a whole, it seems that the weight of tourist rentals in the housing market is quite “modest”.

The organization admits that it is not easy to measure supply due to difficulties at the municipal level, but notes that at the beginning of this year there were around 350,000 homes allocated for tourist rental, representing only 10% of residential housing. rental market. When you go into details, you can see that this rate swings very clearly from one point to another in the Spanish geography. In fact, the percentage increases rapidly when we talk about Malaga or Sevilla.

go into details. “These houses are concentrated in the main tourist areas, and in some urban areas of the Mediterranean arc (Marbella, Malaga or Elche) the high ratio of tourist housing to rental housing is noted, and in the surrounding areas, rates exceeding 20% ​​in one of the urban areas of the northern peninsula”, clarifies this situation .

In certain parts of the country, such as central Barcelona, ​​Valencia, Madrid or Seville, holiday rental percentages are high relative to the housing stock. There are parts of the city of Seville where it is estimated that the number of tourist apartments will be 1.5 times more than ordinary residences.

What is balance? BE leaves other interesting readings to understand the sector, such as that the social rental fleet in Spain is “too small” within the framework of developed economies, that the profitability of landlords is greater in low-income areas, or that 40% of home renters rent. a larger portion of their salary than must be paid for their residence; However, his general diagnosis is that rentals have gained importance over the years.

The agency estimates that the number of people living in rental homes by the end of 2023 is 3.3 million more than in 2007. “This significant increase was made possible by the addition of more than 1.3 million homes to the rental housing stock. In 2023, this figure was approximately 3.6 million.”

However, supply continues to fail to keep up with high housing demand. In fact, when the increase in rental prices is analyzed (an overall increase of 28.5% between 2015 and 2022 is mentioned, although in some cities this rate is much higher) it leaves a clear message: “They are the result of an increase in demand rather than an insufficiently increasing supply.” is big”.

Image | Alex (Unsplash)

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