Friday, January 20, 2023
Real Estate HousinGo Trends

Rental in Spain: history of a spiral

Renting in Spain is exposed to a trajectory of ups and downs that result in price mismatches that confuse the buyer. This affects housing in general in Spain, but also the luxury realRenting in Spain is exposed to a trajectory of ups and downs that result in price mismatches that confuse the buyer. This affects housing in general in Spain, but also the luxury real estate market in cities like Madrid. A situation that condemns the market to a spiral that is difficult to escape. 

 Years of experience and knowledge of the field have demonstrated this volatility of supply and demand, and also of prices. This is corroborated by the real estate agency "HousinGo by David de Gea", a reference in the real estate sector in Madrid's Barrio de Salamanca.

 

Will rents go down in 2023? 

At the end of 2022, the average rent in Spain was 8.4% higher than in the same period of the previous year, according to a study by idealista.com.

This figure means a rise of 2.7 points with respect to the inflation registered in that month, but the difference is even more pronounced in some specific locations such as Madrid and Barcelona.

Rental prices in Madrid rose by 11.2% last year alone. According to Tinsa data, the rate of effort to acquire a property in this city is 40.3%, a figure that explains the increase in demand for the rental option, and therefore the increase in rental prices. This explains why rents are so "expensive".

This effort figure means that families buying a house have to spend, on average, more than a third of their income. Without forgetting that housing is a basic necessity, this situation is stifling families, which is why others are delaying their purchase as long as possible and opting for renting in the meantime.

And what will happen in 2023, and will rents fall in the short term? According to David de Gea, there is no reason to think about price drops. In addition to the aforementioned factors that influence the rental of an apartment in Spain, and that condition the lives of thousands of families, we must not forget that real estate agencies, in this scenario, prioritize renting over buying as a safer option. 

Taking advantage of the higher demand and, incidentally, making prices more expensive. This measure, by the way, is welcomed by those homeowners who put their properties up for rent.

For this reason, those developers who worked exclusively with the Build-To-Sell (BTS) formula are facing a complex scenario. So much so that they should focus their efforts on promoting new housing projects that can be rented (Build-To-Rent or BTR), in the face of a probable drop in sales. 

 

Barrio de Salamanca: a question of renovations and qualities

Barrio de Salamanca, one of the most valued and prestigious areas of the Spanish capital, follows in the wake of the price of rents and, in general, of housing in Spain. It presents a time to rent their homes higher than the average, which is already high.

If in Madrid tenants take 2.9 months to find a rental property, in Barrio de Salamanca the average is 3.2 months, the highest figure of all the districts of Madrid, with the exception of Centro, with 3.4 months on average.

But let's travel back in time to the first quarter of 2020, before the coronavirus pandemic that hit the country. Then, the average access time to rent in Madrid was 1.4 months, so, doing a quick calculation, we find, from then to today, a 107% increase in the time it takes to find an apartment to rent from the tenant's position.

Predictions confirm that, during 2023, this time will increase more and more in Barrio de Salamanca. The reasons? Low supply versus high demand, which delays the time when a potential tenant acquires the keys to their rental property.

On the other hand, many of these tenants do not find the apartment they are looking for and that adapts to their needs and demands. And the fact is that much of the supply in this district does not match the quality according to the prices. We are talking about old apartments (many of them built in the nineteenth century, within the Plan de Ensanche de Madrid of 1860) that, unfortunately, have not had a plan of updating and reforms by the owners, so many potential tenants are reluctant to pay high prices without the corresponding reforms.

 At HousinGo we have found, after years of experience in the neighborhood, that when apartments in this area are offered sufficiently renovated and with quality materials, the market accepts them spectacularly.

The prices remain in line with their category, but the response is quick and positive from potential customers, as these apartments stand out above the rest of the offer, in which high rents abound for apartments with an advanced state of deterioration.

 

The recommendation of HousinGo and David de Gea 

To deal with this spiral and the mismatches between supply and demand, HousinGo recommends having the advice of a specialized real estate portal, with great professionalism and knowledge of the sector and the peculiarities of Barrio de Salamanca.

Working with us is a bet for sales operations carried out efficiently and in the shortest possible time in this area, knowing in detail the average rent in Madrid and the price of housing.

In this way, both landlords and tenants will find the best solution to their particular interests, as well as a meeting point to their respective needs regarding prices and characteristics of the property.

That is when we talk about the concept of luxury takes on its raison of being, that is, when we pay for services that are really worthwhile and provide us with well-being and a quality of life that is out of the ordinary. estate market in cities like Madrid. A situation that condemns the market to a spiral that is difficult to escape. 


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