Tag: average rental price

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

Fotocasa: Rental Prices Rose By 4.8% YoY In June

18 July 2016 – Expansión

Over the last three years, the prices of most goods and services have remained stable, to the extent that many economists have come to fear that Spain will enter into a period of deflation. Nevertheless, in the midst of these “doldrums”, there is a market where prices have already started to pick up pace: the residential rental sector. According to the latest data from Fotocasa, residential rental prices rose at a rate of 4.8% YoY in June, just two tenths below the historical maximum, recorded in 2006, when the index was first compiled. (…).

As with everything, this market also reflects the two speeds that are being seen in other segments. In this way, prices grew by 15.7% in the Balearic Islands, but remained stable and even decreased in La Rioja, Extremadura and Castilla-La Mancha, reflecting the demographic and tourist pressures in one of the areas and the lack of strength in the others. After the islands, comes Murcia, where rental prices rose by 11.3%, followed by Cataluña (10.7%), Comunidad Valenciana (10.5%) and Madrid (9.9%). All of the other regions fall a long way behind, well below the average.

Something is changing in the rental market. “There is no longer a single market, but rather areas that vary significantly by district and even by street. For example, in Barcelona, rental prices have risen by more than 20% in several neighbourhoods: Gràcia, Sants and Ciutat Vella”, says Beatriz Toribio, Head of Research at Fotocasa. In addition, whilst before the highest rental price increases were seen in those cities with the highest economic growth, now prices are rising by the most in the most popular tourist destinations. That is because tourists are increasingly opting to stay in private accommodation instead of hotels, and increasingly more owners are putting their homes up for rent for this purpose, given that they offer higher returns.

Although this type of housing does not enter into Fotocasa’s calculations, the use of residential properties for this purpose significantly limits the supply of homes, which drives prices up. For example: rental prices rose by 7.1% in the capital of Valencia with respect to last year, but soared by 19.6% in Peñíscola, 21.6% in Gandía, 25.6% in Benidorm and 49% in Santa Pola. (…).

The major exception to this changing pattern in the Canary Islands, where rental prices grew by 3.8%, below the average. That rate of growth was in line with Andalucía (where prices rose by 4.3%, also driven by many towns along the coast), Navarra (where prices also rose by 3.8%), Cantabria and Galicia (3.5% in both cases). There were also significant price increases in Asturias (3.2%), Aragón (3%) and Castilla y León (2.4%).

Finally, prices remained stable or decreased in just four autonomous regions: País Vasco (where rental prices rose by 0.8%), Castilla-La Mancha (0.6%), Extremadura (where they remained stable) and La Rioja –where they decreased by -0.2%.

As a result of the price increases in the last year, Madrid and Cataluña have joined the league of autonomous communities where rents now cost more than €10/sqm, following the path set by País Vasco. These regions are followed by the Balearic Islands (€9.16/sqm) and then Navarra (€7.11/sqm). The cheapest rents are found in Castilla-La Mancha and Extremadura, at less than €5/sqm, followed by La Rioja, Murcia and Valencia (between €5/sqm and €6/sqm).

Original story: Expansión (by P. Cerezal)

Translation: Carmel Drake

Fotocasa: The Residential Rental Market Takes Hold In Spain

30 May 2016 – Expansión

The evolution of average residential rental prices in Spain changed significantly in 2015. In fact, it was the first year during which rental prices increased YoY across 16 autonomous regions since Fotocasa’s Real Estate Index began to analyse rental prices, nine years ago. The annual variation recorded at the end of 2015, 3.6%, was also the highest ever registered in the history of the index. “This general increase in prices is the result of the expansion that the rental market in Spain experienced in 2015; people are increasingly renting, not only because they cannot afford to buy homes, but also because there has been a change in mentality in favour of renting”, said Beatriz Toribo, Head of Research at the real estate portal. “Moreover, the high returns being offered in this market have led many investors to buy homes with a view to renting them out”, added Toribio.

Cataluña was the autonomous region that experienced the highest price rises (during 2015), of 10.7%. Rental prices rose in all 10 of Barcelona’s municipalities. The average price there amounted to €13.3/sqm/month. In the Community of Madrid, the annual variation at the end of 2015 was 6.5%, the highest increase in the series’ history. In the case of Madrid capital, prices rose by 6.9% and the average rental price amounted to €11.2/sqm/month. Moreover, for the first time in nine years, rental prices rose in every district of the Madrilenian capital. “In general, prices are forecast to stabilise during 2016 because the rental market is here to stay in Spain”, concluded Toribio.

Original story: Expansión

Translation: Carmel Drake