Servihabitat: Rental Prices Will Rise By 10%+ In 2016

26 October 2016 – El Mundo

The average price of rental housing in Spain is expected to grow by more than 10% in 2016, according to a study by Servihabitat Trends, the research and market analysis platform supported by Servihabitat, which has compiled its information using official sources, data from the portfolio of rental assets that the servicer manages and several major real estate websites.

In the regions of the Balearic Islands, the Community of Madrid, País Vasco, Cataluña, the Canary Islands and Cantabria, the average rental price is higher than the Spanish average and according to Servihabitat, that trend is expected to continue to rise.

The typical rental home in Spain is a multi-family property, constructed more than 35 years ago, measuring less than 90 m2 and costs around €540 per month on average.

37% of the households who rent are single parent families, which is the segment of the population that has grown by the most in the last 10 years; they are followed by single person homes (28.5%) and those who have dependent children living with more than two adults (23.9%).

Moreover, the Spanish rental market reflects significant demand from overseas tenants: according to 13.9% of Servihabitat’s network of collaborating agents (APIs), most of their rental operations involve foreigners, in particular people from Morocco, followed by people from Britain and Romania.

Rental properties now account for 22.7% of Spain’s residential stock

The study notes that, in recent years, the number of households living in rental accommodation at market prices in Spain has risen from 9.5% in 2005 to 13.1% in 2015. Moreover, 22.7% of the more than 18.3 primary residences in Spain in 2015 were rented out, in other words, almost 4.2 million.

The supplies of rental housing per inhabitant and per household in the Community of Valencia, Castilla y León, Cantabria, Andalucía and Castilla-La Mancha exceed the Spanish average, as do the supplies in the coastal provinces of Málaga, Cádiz and Alicante, and cities with a significant study population such as Salamanca.

Returns of 5.4%

In terms of the gross average return from rental properties in Spain, the figure amounts to 5.4%, with Cataluña, the Community of Madrid and the Balearic Islands all exceeding the national average.

According to the Director General of Real Estate at Servihabitat, Juan Carlos Álvarez: “More than 40% of the new operations that we currently carry out at Servihabitat involve rental properties, which means that we should respond to these needs and align ourselves with the interests of consumers”.

For this reason, the company is committed to the rental market and has been for the last three years, during which time it has expanded its rental portfolio to include almost 60,000 assets, representing “the largest stock in Spain”.

Original story: El Mundo

Translation: Carmel Drake