19 May 2016 – El Mundo
Demand for rental housing from the population cohort aged between 20 and 39 will exceed half a million within the next few years in Spain, in a market in which 15% of homes are already occupied on a rental basis.
That was one of the findings from the XVII Annual Meeting of Esade Alumni’s Real Estate Club, which focused on the residential rental market in Spain and Europe and its viability from the point of view of operations, financing and capital markets. The meeting was attended by more than 150 specialists from the real estate sector.
The President of Esade Alumni’s Real Estate Club, Eduard Mendiluce, said that residential rental properties represent “an investment in the future” and he made reference to the business models that operate in other European countries, where a couple of companies manage stocks of 200,000 and 300,000 homes.
Eduard Mendiluce, who is also CEO of Anticipa, said that the residential rental market “is here to stay” because it responds to structural changes and he said that we do not currently have a stock of residential homes for rent of the quality that meets demand.
Meanwhile, the Professor of Applied Economics at the Autonomous Universiry of Barcelona, Josep Oliver, explained the reason for that demand. According to data from INE, 42% of young people aged between 20 and 39 live with their parents, approximately five million people, of which 2.3 million have a job. “From this group, we can expect to see a demand for 500,000 rental homes in Spain over the next few years”, he said.
Similarly, the Director of Diversified Industries and Real Estate for EMEA at JP Morgan, Guillermo Baygual, analysed the market from the point of view of investors, who “are looking to obtain returns with minimal risk”.
Within the European framework, he made reference to UK legislation, which most protects the interests of owners and Dutch legislation, which is the most favourable towards tenants. In turn, the CEO of Sogeviso, Pau Pérez de Acha, made reference to social rental housing, given that in Europe the average proportion of rental housing allocated for that purpose amounts to 12%, whilst in Spain, that figure ranges between 0.8% and 2%.
Similarly, the CEO of Immeo, Thierry Beaudemoulin, analysed the German rental market, where just 45% of the population live in their own homes, one of the lowest rates in Europe. (…).
Finally, the Director for Strategy and Business Development at Acciona Real Estate, Luis Morena, also predicted a positive future for the residential rental market.
This will involve the elimination of tax incentives for house purchases; the maintenance cost of home ownership, which is similar to rental cost; and the recovery of the labour market, which is increasing geographical mobility and therefore demand for flexibility in terms of the residential real estate market.
Moreno pointed to insufficient financing to buy a home as another one of the key factors that will influence the increase in the percentage of residential rental homes in Spain in the short term. Currently, 15% of Spanish homes are occupied on a rental basis, whilst in 1970 that figure accounted for 30% of the available stock of homes.
Original story: El Mundo
Translation: Carmel Drake