22 April 2016 – El Economista
Average residential rental prices in Spain rose by 3.1% during the first quarter of the year, which took the price as at March 2016 to €7.24/m2/month, according to the latest data from fotocasa’s Real Estate Index.
The real estate portal explained that this quarterly increase in residential rental prices represents a continuation of the predominant trend seen in 2015, the year in which rental prices started to rise again after eight years of widespread decreases.
“The rental market has been experiencing strong growth in recent years and that is manifesting itself in the form of rental prices. According to recent studies by fotocasa.es, 60% of the landlords that rented out a home last year did not have to reduce the asking price in order to let the property and 90% found a tenant within six months”, explained the Head of Research at fotocasa, Beatriz Toribio.
In fact, the increase recorded during Q1 2016 is the highest in the history of fotocasa’s Real Estate Index, which began in Q1 2007, when rental prices rose by 4.9%. Since then, rental prices have decreased every quarter, with just a few exceptions, in 2011 and 2014. Quarterly rental prices started their recovery in 2015, with increases of 2.8% and 1.5% in the first and second quarter, respectively.
Increases in 11 autonomous regions
During the first quarter of the year, rental prices increased in 11 autonomous regions on a quarterly basis and in all regions on an annual basis. In fact, the YoY variation in Q1 2016 was 4%, the second highest increase in the history of fotocasa’s Real Estate Index, which dates back to 2006. (…).
Since reaching the maximum price in May 2007 (€10.12/m2/month), rental prices have recorded a cumulated decrease of 28.5%. In this sense, five autonomous regions recorded decreases of more than 30% since their peaks five years ago. Thus, Aragón is the autonomous region that has seen the sharpest decreases in rental prices (-40%), followed by Castilla-La Mancha (-35.6%), Cantabria (-35.3%) and Valencia (-31.9%).
Until March, rental prices increased in 11 autonomous regions, with rises ranging from 6% in the Balearic Islands to 0.8% in Andalucía. At the other extreme, rental prices decreased in six autonomous regions during Q1. The reductions ranged from 3% in La Rioja to 0.1% in the Canary Islands.
In terms of rental price rankings, for the first time in recent years, Cataluña displaced País Vasco as the most expensive autonomous region in which to rent a home. Specifically, the price in Cataluña amounted to €10.19/m2/month in March, followed by País Vasco (€10.18/m2/month) and Madrid (€10.08/m2/month). At the other end of the scale, Extremadura (€4.46/m2/month) and Castilla-La Mancha (€4.66/m2/month) were the two regions where residential rental prices are most affordable.
In terms of the evolution of prices by province, 32 provinces recorded rental price increases with respect to December, with the price rises ranging from 9.2% in Huelva to 0.1% in Las Palmas. By contrast, rental prices fell in 17 provinces, with decreases ranging from -0.2% in Córdona to -3.4% in Teruel. Meanwhile, prices remained stable in Lleida. (…).
Original story: El Economista
Translation: Carmel Drake