Airbnb Delists 18,000 Andalusian Rental Flats Lacking Registration

5 October 2018

Since Monday, the online short-term rental platform is only displaying properties in Andalusia that are registered with the tourism office, reducing its supply to 40,800 listings.

Beginning this week, the vacation rental giant Airbnb will only display listings for homes in Andalusia that comply with local regulations and have the relevant registration number. The new requirement has led the online platform to eliminate 18,000 listings in Andalusia, reducing the supply in the region to 40,800, the company announced. The new rules are a severe blow to informal offerings in the region which will now no longer be able to advertise on the most important website for holiday rentals. “This unique agreement provides present and future hosts with the security and clarity they need to share their home responsibly,” the company stated.

Although the platform does not have data by province, statistics provided by the Tourism Registry of Andalusia points to a high concentration of tourist apartments on the Costa del Sol, an area that accounts for more than half of the supply of tourist housing for the region as a whole. The latest figures showed that 24,342 tourist apartments were registered in the province of Malaga, equivalent to a total of 127,218 beds.

Airbnb stated that almost half of the 18,000 listing for flats that were delisted for not having the necessary registration with the Tourism Registry of Andalusia had not had any reservations in the last year. The rest operated normally, despite not complying with the regulation. Airbnb’s new requirement served to remove those offerings from the market. That became possible after the company reached a compromise with the local government, through which Airbnb implemented a simplified online registration system earlier this year aimed at helping Andalusian hosts to comply with local rental laws.

“Airbnb’s agreement with the municipality was implemented in full on October 1. After the creation of a simplified online registration system, we have deactivated the advertisements that, as of September 30, did not include a registration number in accordance with the Andalusian tourism law,” the company announced. After the reduction, the platform now has 40,800 listings for tourist properties in Andalusia. The company also stated that almost 80% of property owners, or hosts, as the company calls them, have just one listing, while just 2% have more than five.

The typical Andalusian host is 47 years old and rents their property for 33 days a year. The majority of hosts are women (53%), and 79% of them have between 30 and 59 years of age.

The platform values its cooperation with the municipality and sees it as a model for the future. “Airbnb cooperated with the Andalusian government to create a tool that helps to support the community of responsible home sharers and is the only platform that is committed to sharing data with the authorities, making the task of inspection easier.”

Other online platforms grouped under the PAT banner announced that they would request mandatory registration for any new holiday homes in Andalusia starting this week. The association, made up of HomeAway, Rentalia, Spain-Holiday.com and Niumba, has a total of more than 60,000 holiday homes in Andalusia. It is another step towards the elimination of the informal market in the region and will further encourage the registration of flats that operate in the sector. Also, the PAT platforms announced their commitment to seek “solutions and tools” to extend the registration requirement to the entire supply of flats in Andalusia. The local government also announced “concrete actions” to create a new state framework for the sector by the end of the year.

Original Story: Diário Sur – Pilar Martínez

Photo: Francis Silva

Translation: Richard Turner

Savills & HomeAway: Spain is the Most Attractive Market for Buying a Second Home

29 September 2018 – Finanzas.com

According to an international study compiled by the real estate consultancy Savills and HomeAwayTM, a global expert platform for holiday rentals, Spain is the most attractive destination for investing in a second home, according to 19.3% of those surveyed, followed by Portugal (13.2%) and France (13.1) in third place.

Spain is attractive for overseas investors

According to the survey, 44% of owners of second residences in Spain are foreigners. The main countries of origin of those owners are the United Kingdom (19%), Germany (12%), The Netherlands (4%), France (3%) and Belgium (2%). The remaining 56% of owners are Spanish.

The main areas where second homes are located in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%).

Where are they buying homes?

People’s behaviour when it comes to acquiring a second home is different depending on where the buyers come from. The study reveals that British and Dutch owners are those who buy the most second homes outside of their own countries, nevertheless, Spaniards, Italians and Portuguese citizens tend to choose their own countries as the destination for acquiring second homes (around 95%).

Second homes: for personal use and to rent

According to the study, 28% of Spanish owners cover some of their expenses with revenues generated from the rental of their properties and 38% obtain a profit.

Summary of second homes in Spain

The average price of the second homes acquired last year by the Spanish owners surveyed amounted to €245,000, 22% lower than the average acquisition price ten years ago. Moreover, 28% of those surveyed confirmed that they personally financed the acquisition of their second home, 52% acquired it using a mortgage and 8% inherited or were gifted the property.

In the same vein, Spanish owners of second homes obtain an annual income of €12,000 (from their properties) and they rent them out for 19 weeks a year, on average. 43% of owners had the same number of reservations in recent months as they did during the same period a year ago, 41% had more reservations and 16% had fewer.

Second homes, with some specific characteristics

Two-bedroom apartments are the most popular types of second home for the Spanish owners surveyed.

Features that owners are looking for when it comes to buying a second home include: proximity to restaurants and bars (88%), a balcony or terrace (88%) and proximity to the supermarket and shops.

According to Juan Carlos Fernández, Director General for Southern Europe at HomeAway: “The fact that Spain is the most attractive destination for foreigners looking to buy a second home indicates that Spain is a robust market that is very attractive to investors and that is something that we must take care of and promote”.

Owner profile

  • Average age when they acquired the property, in 2017: 51 years old
  • Average number of weeks leased during the year: 19 weeks
  • Typical property type: 2-bedroom apartment
  • Average acquisition price in 2017: €245,000.

Original story: Finanzas.com

Translation: Carmel Drake

Madrid Plans Drastic New Rules that Could Affect 95% of Tourist Apartments

17 August 2018

The draft regulations from City Hall would mean any flat without separate access to the street would need a license.

The boom in tourist apartments in Madrid rented out via accommodation sites such as Airbnb is causing problems with regard to habitability, harmonious cohabitation, and safety, and is “affecting the price of housing,” causing an “astronomical rise in the price of rents” in the city centre. That’s according to new regulations for the sector proposed by City Hall, and which plan to drastically limit the supply of vacation homes in the most central neighbourhoods.

The plan states that the Airbnb model is causing the “expulsion of residents”

The rise in tourist apartments on offer via sites such as Airbnb and Homeaway is rapidly changing cities across the world, and as such has sparked debate over the pros and cons of the model. A report published this week by Spain’s competition watchdog, the CNMC, praised the arrival of such sites, pointing out that they offer an income stream for property owners, drive down prices of vacations, and “empower” the consumer.

In contrast, the cons can be found in the new plan from Madrid City Hall, which will be up for debate until September 27, ahead of its definitive approval.

The plan, to which EL PAÍS has had access, states that the Airbnb model is causing the “expulsion of residents,” and is having an “impact on the habitability of buildings, harmonious cohabitation, the safety of residents, and the use of public spaces, and is affecting the price of housing and the growth of other economic activities.”

In order to defend “residential use” of these neighbourhoods, the new plan states that tourist apartments that are rented out on a professional basis (i.e. more than three months a year) must obtain a license. And in districts in the centre and another three neighbouring areas, these licenses will not be granted if the apartment in question does not have an entrance that is independent from the rest of the flats in the block.

City Hall says that it is not trying to eliminate this kind of accommodation altogether

In practice, this will veto the vast majority of the current supply of tourist rentals, given that the rules will also exclude ground floor apartments that can be directly accessed from the street. When Madrid City Hall announced the plan several months ago, they forecast that this could affect 95% of apartments on offer.

City Hall says that it is not trying to eliminate this kind of accommodation altogether and points out that apartments that are rented out for fewer than three months a year, or where just a room is offered, will not be subject to these rules. The aim, they say, is to reduce the saturation of the market and to “decentralize use” so that more apartments are offered in other areas of the city.

The draft plan argues that the centre of the city is easily accessible from practically any area of the city, with four out of every five neighbourhoods in the capital under half-an-hour away via public transport.

The aim is to reduce the saturation of the market and to “decentralize use” so that more apartments are offered in other areas of the city.

The text describes a process by which more and more apartments are being converted into tourist rentals, thus reducing the stock of housing in the residential market and pushing up rents, as well as seeing many residents forced to leave and turning the centre into a high-income zone. “This increase in real estate market prices can have significant negative impacts,” the report states, “implying a new residential class segregation.”

The draft regulations also point out that the model is having a particular effect on young people, “who traditionally have rented properties in these neighbourhoods in groups.” What’s more, the text continues, this “colonization” is changing economic activity in these areas, prompting a greater focus on meeting demands of tourists.

Original Story: El País – Julio Núñez / J. A. Aunión

Foto: Luis Sevillano

Translation: Richard Turner

 

Barcelona’s Town Hall has Shut Down 2,355 Illegal Tourist Apartments in 2 Years

11 July 2018 – Inmodiario

After launching the emergency plan against illegal tourist apartments (HUT) in July 2016, the Town Hall of Barcelona has closed 2,355 properties and is in the process of shutting down another 1,800.

Moreover, this summer the “Fair Tourism BCN” campaign is being promoted once again to inform and raise awareness amongst citizens and visitors alike about the dangers of this illegal activity for everyone.

In total, 10,635 files have been opened and 5,503 fines have been imposed, five times as many as during the period from 2014 to 2016. The number of termination orders rose from 663 in 2014 to 4,148 in 2016.

By area, the files opened have been located primarily in L’Eixample (3,193) and Ciutat Vella (2,920), followed by Sant Martí (1,220), Sants-Montjuïc (1,042) and Gràcia (939).

In addition to this activity, inspections have been conducted of: 81 entire buildings where it was suspected that illegal tourist activity was being undertaken; 21 student halls, also suspected of tourist activity; and 61 illegal B&Bs, under the umbrella of rooms for rent, which were leasing all of their rooms.

Besides the fining activity, the team comprising more than 100 inspectors and visualisers is continuing to work to ensure that closed down apartments do not reopen, to identify new illegal properties and to hunt down the organised networks that are managing more than one property.

In parallel, work is continuing with holiday rental platforms through a joint roundtable that has been working for some time with Homeaway, Booking, TripAdvisor, Rentalia and Apartur, and which has recently been joined by Airbnb.

Work is currently on-going to allow the Town Hall to have access to data about users who have joined the platforms since 1 June 2018.

Original story: Inmodiario 

Translation: Carmel Drake

Treasury Requires Tourist Rental Platforms to Submit Quarterly Informative Returns

1 March 2018 – Expansión

The Government wants to put a stop to the fraud that is happening in the emerging market for tourist apartments. To this end, it is going to intensify the inspection of companies dedicated to the transfer of use of flats, such as Airbnb, HomeAway, HouseTrip, MyTwinPlace, Only-apartments, IntercambioCasas and Rentalia. For that, it is going to require them all to provide much more information and it will conduct a quarterly control of all of their activities. Through this, it wants to improve the “prevention of tax fraud for people and entities, in particular, the so-called collaborative platforms that mediate the transfer of use of homes for tourist purposes”, according to the draft ministerial order designed to put a stop to these kinds of irregularities, to which Expansión has had access. The text approves the so-called “model 179 informative declaration”, together with the conditions and procedures for presenting the required information before the Treasury.

The measure forms part of the strictest control that the Treasury wants to exercise over intermediaries in a rising sector, such as the tourist rental market, which has experienced a genuine boom in recent years and which now has 513,820 beds, 30% more than the sum of Spain’s hotels, hostels and B&Bs (393,838), according to data from Exceltur.

Until now, some of the main initiatives have been directed at users themselves, such as the warning issued last year by the Tax Authorities to more than 21,500 people that had leased their homes through these platforms, advising them that they must declare the money received in their tax returns.

The Treasury wants to close the door on the lack of transparency surrounding certain tourist rentals, behind which are sometimes even hotel chains, which lease homes through the platforms, and are in turn disguised as private users.

As a result, the ministerial order that the Department of Tax Management at the Tax Authority has prepared, emphasises certain concepts that may seem obvious, such as the importance of identifying the owner of the home or of the right “by virtue of which use of the dwelling is transferred”, if that is different from the rightful owner of the home. Moreover, all of the features of a property must be identified. Together with the general registry information, the specific details of each one of the operations that are carried out must be reported: the number of days during which a client leases the home and the price paid to the owner in exchange for its use.

This new order from the Treasury comes in addition to local legislation from many Town Halls such as those of Barcelona, Madrid and the Balearic Islands, which have proposed “ceilings” to stop the overheating of rental prices that has resulted from the boom of Airbnb and similar platforms. In fact, according to calculations from Urban Data Analytics for this newspaper, the upwards trend from the collaborative economy has caused rental prices to rise by an additional 6% in the Eixample district of Barcelona and by an additional 4% in the Centro district of Madrid in one year. That happens because the properties in question generate double the returns of a long-term rental property “A 40 m2 one-bedroom home in the Puerta del Sol area of Madrid generates €1,513 per month on Airbnb and a traditional rent of €700”, says the company by way of example.

Grace period

(…) This ministerial order (…) will apply to all transfers of homes for tourist purposes that take place on or after 1 January 2018.

The frequency of these returns to the Treasury will be quarterly (they must be submitted during the calendar month following the end of each quarter). But this year, in order to facilitate the process, those corresponding to the first two quarters of 2018 may be submitted up until 31 December 2018. Those corresponding to the third and fourth quarter will have to be submitted before 31 October 2018 and 31 January 2019, respectively (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Spain’s Regional Gov’ts Clamp Down on Tourist Apartments

28 January 2018 – El Economista

Spain is breaking records in terms of visitor numbers and, in the age of the globalisation of communications, many people are wanting to make money from renting out their homes. This trend has forced autonomous governments and town halls to introduce legislation so that the so-called collaborative economy does not end up turning into unfair competition.

The tourist housing sector has been calling for the homogenous regulation of its activity for some time now, but for the time being, it has had to make do with the regulations approved by certain autonomous governments and town halls, above all those in the most central neighbourhoods, which are seeing their resident populations emptying out in the face of rising rental prices.

The latest to join the regulation train is the Town Hall of Madrid, which has approved a one-year moratorium for the granting of operating licences for all kinds of accommodation in residential buildings exceeding 90 days.

The moratorium will result in the suspension of licences for the opening of new hotels in the centre, a paralysis that in the case of tourist homes also extends to the districts of Chamberí, Salamanca and Arganzuela.

The Community of Madrid is also preparing a decree to regulate homes for tourist use, which will require owners to have a certificate of suitability to guarantee that their properties fulfil the conditions necessary and which will define digital platforms such as Airbnb as “tourist companies”, liable to fines of up to €300,000.

One of the pioneers in regulating this activity was the Town Hall of Barcelona, which prohibits the opening of new accommodation of this kind in the centre of the city, but does allow the closure of existing ones in the outskirts to be compensated, provided the new units are located in exclusive buildings and have not been used for residential purposes.

Moreover, it has strengthened the detection and sanctioning of illegal tourist apartments and, in the application of Catalan law, has fined operators that publicise them.

The Balearic Islands’ Government is also fining people who let their apartments to tourists up to €40,000, and in the case of real estate agents, tourism brokers and the digital platforms that publish them like Airbnb and HomeAway, it is levying fines of up to €400,000.

In fact, last month, sanction files were opened against Airbnb and Tripadvisor for their illegal supply of rental apartments in the Balearic Islands.

Meanwhile, since 2016 in Andalucía, the Junta has obliged homes used for tourist purposes to be recorded in a register, in order to avoid fraud, intrusion and unfair competition against hotel establishments (…).

After a great deal of controversy with tourist associations, the Canarian Government regulated the use of holiday rentals in 2015, and although the High Court annulled the article that prohibited holiday rentals in tourist areas, the law is still valid because the Executive filed an appeal with the Supreme Court, which has not ruled yet (…).

Any apartment offered through a digital platform in the Community of Valencia must be registered with the Valencian Tourism Agency and is subject to governing regulations in terms of safety and quality.

Murcia, meanwhile, has implemented a specific plan to reduce the current mismatch between the regulated and unregulated supply, putting a stop to intrusion and reinforcing the fight against employment on the black market, which is typically precarious and exploitative.

By next spring, the Community of Castilla-La Mancha will have drafted a law that will put an end to the legislative vacuum in this regard and which, according to the regional Government’s calculations, will allow it to shed light on between 1,500 and 2,00 tourist homes that are advertised on several online portals, but which offer no guarantees for clients and generate no tax revenues for the administration.

In Euskadi, last month, the Basque Government approved a draft decree that seeks to regulate the most tourist aspects of homes, providing guarantees to advertisers, neighbours and tourists, given that the decision to grant licences lies with the town halls, such as those of Bilbao and San Sebastián, which account for two thirds of the almost 2,500 tourist apartments in the País Vasco (…).

In March 2017, the La Rioja Government approved a general tourism regulation, which distinguishes tourist apartments – those that contain three or more accommodation units in the same building – from homes for tourist use, including those that are advertised online.

Last year, a decree entered into force in Asturias to regulate tourist apartments and, according to the most recent available figures, 640 registrations have been recorded and 159 sanction files have been opened (…).

Finally, the Junta de Extremadura is working to reform Law 2/2011, dated 31 January, governing the Development and Modernisation of Tourism in Extremadura, which will materialise this year and which will offer new instruments to help in the fight against fraud involving tourist apartments.

Original story: El Economista

Translation: Carmel Drake

Rental Prices Soar & Are Now Equivalent To The Minimum Wage

2 August 2017 – El Economista

Renting a holiday home for short periods of time has become fashionable. According to data from Exceltur, the association that represents 23 of the largest companies in the tourist sector, the stock of homes available for tourist use amounted to 1.7 million at the end of last year. In other words, there is currently one tourist home for every two regulated beds. This new business, which has always existed – but which is now experiencing a boom – is being criticised in the market at the moment, since holiday homes are being blamed for the rise in residential rental prices.

According to the real estate portal Idealista, “the rise in rental prices has nothing to do with the supply of accommodation for tourists given that that is static and there is a lot of rotation in the traditional rental market”. Moreover, Idealista adds another reason to distinguish the rise in traditional rental prices from the supply of holiday homes, since “the greatest increases in rents have been registered in those neighbourhoods that are least attractive to tourists”.

Therefore, for Fernando Encinar, the co-founder and Head of Research at Idealista, “the rise in rental prices is being driven, exclusively, by the improvement in employment”. Joseba Cortázar, PR Manager Iberia at HomeAway, shares this view: “There is really no evidence to suggest that tourist homes are driving up rental prices. Prices are rising in line with the evolution of the economy”.

Regulation

On the other hand, Gerard Marcet, founding partner at Laborde Marcet, says that “it is inevitable that tourist housing will have an inflationary effect on the rental sector in Spain if it is not properly regulated. If we do not take effective measures, it is almost impossible to control what each individual does in his or her home and whether or not he or she pays tax on the accommodation services he or she offers outside of the regulatory framework.

For this reason, rental prices are rising at double-digit rates in Spain’s major cities. In Barcelona, Madrid and San Sebastián, it is no longer possible to rent a property for less than €650-€700, which is basically the minimum wage”.

Solutions

Which solutions can be introduced to regulate this market? Joseba Cortázar says that “we need public-private collaboration between the platforms and associations in the sector to better understand the phenomenon and arrive at a consensus in terms of legal regulation, but we should not demonise the sector. We have to establish an ethical code of conduct for the various platforms to adopt”.

In this sense, Gerard Marcet thinks that “on the one hand, we need to approve unique, ambitious and effective regulation to put an end to this irregular practice and that the only thing that it does is to encourage a price war and the rise of the underground economy. On the other hand, we need to grow the stock of public housing to increase the supply of homes available for rent and, whereby, deflate prices in the market, allowing people access to homes at reasonable prices, given the salaries in Spain. Finally, in cities such as Barcelona, the government should unblock the situation that the hotel sector has been immersed in since the hotel moratorium was approved”.

Original story: El Economista (by Luzmelia Torres)

Translation: Carmel Drake

Tourist Rental Homes Generate Almost €14,000M In 2 Years

10 July 2017 – Expansión

HomeAway, one of the main tourist rental home companies, estimates that the economic impact generated by this activity in Spain during the period from June 2015 until June 2017 amounted to almost €14,000 million. That amount exceeded the impact generated during the previous two-year period by €2,824 million, when it amounted to €11,120 million, according to the IV Holiday Rental Barometer in Spain, compiled by HomeAway.

The use of tourist homes has increased by 25% in the last two years, given that they were used for more than 22 million visits.

On Thursday, the professor of Marketing at the University of Salamanca and author of the study, Pablo Muñoz, highlighted the consolidation in the sector amongst clients, given that 32.6% of those surveyed use both hotels and tourist apartments, depending on their requirements. 61% of the people surveyed only ever stay in hotels.

The report reveals that the users who stay in these types of homes spend more during their stay (€477) than guests who sleep in hotels (€331). The Director General of HomeAway in Spain, Juan Carlos Fernández, underlined that this economic impact is reflected, in particular, in those businesses located close to tourist homes.

On the other hand, HomeAway confirmed that its legal team is analysing a draft bill that is being promoted by the Ministry of Finance to analyse “the extent to which a national Administration has the power to request data about users” and to establish its position before communicating it to the Tax Authority.

Collaboration

The Communications Director at HomeAway, Joseba Cortázar, said that “HomeAway is open to collaborating with the Tax Authority to provide greater transparency in terms of tax collections”. And he reiterated that the veto of neighbouring communities is a possibility that is already reflected in the Horizontal Property Law: “This activity cannot be carried out if the community bylaws prohibit it”.

Original story: Expansión (by Miriam Vázquez)

Translation: Carmel Drake

There Are 17,000 Illegal Tourist Apartments In Madrid

26 April 2017 – Expansión

In just a year, the number of tourist apartments has increased by 100% in the Spanish capital. Of the 20,000 that currently exist in the Community of Madrid, only 3,000 have been registered. Hoteliers are asking for an urgent decree to be passed. 

“For a year and a half, we have been hearing that the Community of Madrid is going to publish a new decree to regulate the supply of tourist accommodation, but nothing. To open a hotel, one needs to comply with 400 rules, we have counted them; meanwhile, tourist apartments are not subject to any legislation. Unfair competition is harming every hotel in Madrid”. That is according to Madrid’s Association of Hotel Businesses, which is alarmed by the boom of tourist accommodation in the city.

According to the latest report from Exceltur, the alliance for tourist excellence, the supply of this type of tourist home has risen from 10,000 (37,000 beds) in 2015 to 20,000 (74,000 beds) in 2016, which represents an increase of 100%. Of the 20,000 beds, only 3,000 are actually registered, according to the Community of Madrid’s decree dated 2014, which governs tourist activity. (…).

To understand the severity of the problem, which has led to a 20% increase in rental prices in the city centre in a short space of time, causing gentrification, the expulsion of residents who have lived there for their entire lives, the Association presents another fact: Madrid’s hotels offer 80,000 beds in total, just 6,000 more than offered by the tourist accommodation establishments.

“We want to participate in the modification of the current decree, we don’t want to receive it a day before it is approved, but rather we want to work with the authorities to make the legislation correct and effective for both hoteliers and residents”, said Mar de Miguel, President of the Association. She added that these accommodation alternatives, besides not complying with the majority of the rules in terms of security or quality, are not subject to the urban development plan and do not pay the corresponding taxes, which is leading to tax fraud of €800 million per year. (…).

The Community of Madrid plans to legalise the market although it is very aware of the handicap that it faces. “The problem is that there is no legal precedent in Europe due to the mixing of jurisdictions and the reality of the fact that the activity is being performed in individuals’ homes, which significantly limits the capacity to exert control over it”, explained Carlos Chaguaceda, the region’s Director of Tourism. Homes let to tourists are therefore not regarded as businesses by law, and so “the Administration is unable to intervene in an agreement reached between two parties to rent a home”, said the Director of Tourism. (…).

The regional government proposes the creation of a register for these tourist apartments, where the owner legally acknowledges his/her activity. “Ideally, we would have the capacity to act against any platforms that advertise these properties online (without the corresponding permissions). For example, if a property does not have a registration number, it may not be advertised on any website”, suggested the Director of Tourism. (…).

Meanwhile, the Town Hall of Madrid considers that the Spanish capital is a long way from the problems that hoteliers are facing in Barcelona and Paris, given that the average number of beds per 1,000 inhabitants is 2.7 in the Spanish capital compared with 8 in the Catalan capital, but even so it wants to minimise the “risks of saturation” that is starting to exist in certain neighbourhoods, such as Cortes. (…).

The Town Hall is also looking to sign “memorandums of understanding containing certain commitments with Homeaway and Airbnb” (…).

Original story: Expansión (by R. Bécares and L. F. Durán)

Translation: Carmel Drake

Airbnb, HomeAway & Wimdu Outperform Traditional Long-Term Lets

23 February 2017 – El Confidencial

Traditional rental agreements (…), which are governed in Spain by the Urban Rental Act (LAU) and which allow a tenant to live in a home for an extended period of time, are starting to become scarce in some very specific areas of large cities such as Madrid and Barcelona. They are falling victim to the unstoppable progress of so-called tourist apartments or short-stay lets (available on a daily, weekly or monthly basis), which have grown like wildfire in recent years, thanks to the development of platforms such as Airbnb, HomeAway, Wimdu, Niumba, Rentalia and Booking.

Users consider that these assets offer a much more flexible and economic alternative than the product offered by the hotel sector. Meanwhile, homeowners have found a business niche and are generating extra income both from their own homes and from properties acquired as investments. Moreover, their yields are ranging between 4% and 8%, which is well above those offered by other traditional investment products at the moment, including traditional rental properties.

To give us an idea of the volumes being handled by these types of platforms, Airbnb has 13,000 online adverts in the city of Madrid, whilst Idealista has 8,700 adverts for rental homes. In Barcelona, the online platform has 20,000 adverts compared with 6,400 on the real estate portal.

Nevertheless, the problem is limited to very specific locations, such as Malasaña and Chueca in Madrid and Las Ramblas and El L’Eixample in Barcelona. There it is almost impossible to find a long-term rental home. As such, the few products that do come onto the market are leased in a matter of hours and at much higher prices than they were just a couple of years ago. (…).

Rental prices in Malasaña now rarely fall below €800 for a one-bedroom flat measuring just 40m2, but on average, homes there cost between €1,200 and €1,300 per month. On the real estate portal Idealista, there are a few 60m2 flats for rent, for which the owners are asking €2,700/month and even €3,500/month for luxury properties.

Emergence of individual investors

Airbnb defends the “home-sharing” concept, saying that it does not remove available housing from the market because people who live in these homes are still around, they are just sharing their primary residences. Some of these people are using the money to pay for their housing costs”, says the platform. “Studies have been carried out in several cities around the world, showing that the number of homes advertised on Airbnb for exclusively professional use is too low to have any impact on the housing market”.

Nevertheless, the high returns offered by tourist apartments have led many individuals and small-time investors to buy homes in these areas, to subsequently sell them or rent them to tourists. Specifically, individual investors are behind 3 out of every 10 house sales in Madrid, according to data from Tecnocasa. (…).

A very localised phenomenon

What is happening in Malasaña is also being seen on some other very specific streets both in Madrid and Barcelona, where rental prices have really soared. According to Urban Data Analytics, rental prices have risen by more than 20% in neighbourhoods such as Sant Andreu and Sants-Montjuïc, and by 15% in areas such as Gràcia, where prices decreased slightly during the crisis. (…).

According to Bankinter, in its latest report about the Spanish residential sector, these price increases will not last forever. “In our opinion, these double-digit increases, which are driven by a shortage of supply and the boom in tourist rentals, will not last in the long term, nor will they spread to the market as a whole, especially if new legislation is introduced to limit the number of tourist homes a given owner may rent out”.

Sources at Airbnb insist that “The increases in house and rental prices are due to normal factors at play in the real estate market, including: the high demand to live in cities, the appeal of real estate as investment property, the lack of space to build new developments…also, the pressure on house prices is not just being seen in Barcelona, it is happening in all of the large cities around the world (….). House prices were rising before Airbnb ever existed (…)”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake