8 February 2018 – Eje Prime
Rental prices are resuming momentum in the Spanish market. After years of gentle rises followed by three consecutive years of decreases, rental prices closed 2017 with an increase of 2%, almost double the rate seen in France and Italy, according to data from the European statistics agency, Eurostat. For the first time since 2008, the rise in Spain is higher than the average recorded for the European Union as a whole.
Although owning your own home is still the preferred model for the majority of the population in Spain, the rental segment has been gaining strength in leaps and bounds, especially since the crisis.
According to the latest available data, also compiled by Eurostar, in 2016, 22.2% of Spaniards lived in rental properties, compared to 77.8% that lived in their own homes. Specifically, 13.8% of the population was paying rent at market price, whilst 8.4% had a reduced or free rent.
In 2006, just 19.8% of Spaniards lived in rental properties, well below the European average, which amounted to 27.2% at the time. Nowadays, the average for the EU stands at 30.9%.
Despite the rise in rentals, prices have evolved very unevenly in recent years. In 2008, at the height of the economic crisis, residential rents soared by 4.1% in Spain, above the average for the EU, which amounted to 3.7%.
In the following years, rental prices continued to rise, except for a slight dip in 2009, although below the EU average. Nevertheless, after four years on a bullish streak, rental prices started to fall in 2014 and have been declining since then, with reductions of 0.2% in 2014, 0.6% in 2015 and 0.3% in 2016.
In 2017, for the first time in almost a decade, Spain was once again one of the fifteen countries where rental prices rose by more than the EU average, which stood at 1.7%.
The country that recorded the highest increase in rental prices was Turkey, where rents soared by 11.1% last year. It was followed, albeit at a distance, by Estonia, Lithuania, Serbia and Latvia. The first mature market to appear on the list is the United Kingdom, where house inflation reached 2.7%.
Prices also rose at a similar rate to Spain in the Czech Republic, Hungary, Belgium, Austria, Sweden and Norway. By contrast, other mature markets such as Germany, the USA (which Eurostat also analyses), Italy and France registered more moderate rises of 1.7%, 1.7%, 1.3% and 1.2%, respectively. The only country in Europe where rental prices decreased in 2017 was Island.
This data corresponds to the House Price Index, compiled by the European statistics agency Eurostat. In Spain, several sources are published each year about the evolution of rental house prices, primarily by real estate websites and agencies, although the Ministry of Development recently announced the launch of a new official quarterly statistic.
Original story: Eje Prime (by I. P. Gestal)
Translation: Carmel Drake