The housing rental market in Spain has witnessed a significant uptick of 10.1% over the past 12 months, as per the latest real estate market report. By the close of December 2023, the average cost of renting a home in Spain stood at 12.1 euros per square meter per month, reaching a historic peak and marking a 2.7% increase compared to the third quarter of the same year.
This national phenomenon hasn’t left Sitges unaffected. In 2023, the cost per square meter for renting in Sitges was established at 15.8 euros, reflecting a positive annual variation of 1%. While Sitges maintains a position above the national average, it is crucial to note that this coastal enclave has experienced moderate growth compared to other regions in the country.
The real estate landscape over the past year has been particularly challenging for those seeking rental homes. The availability of rental properties continues to diminish, and prices have reached historic levels. Factors such as regulatory measures and the approval of the Housing Law in May have significantly contributed to this situation.
Cities like Barcelona, Valencia, and Palma are leading the price surge, with increases of 24.6%, 21%, and 20.2%, respectively. In contrast, Huelva was the only city to experience a decrease, recording a reduction of 0.5%.
Barcelona remains the most expensive capital for renting a home, with a cost of 20.5 euros per square meter, followed by Madrid (17.9 euros/m2) and San Sebastián (16.8 euros/m2). On the opposite end of the price scale are cities like Zamora (6.2 euros/m2), Ciudad Real (6.6 euros/m2), Lugo (6.6 euros/m2), and Cáceres (6.7 euros/m2).
At the provincial level, 49 provinces experienced increases in rental prices over the last year, with Segovia leading the list with a 21.8% increase. The only exception was Lleida, which recorded a 6.8% decrease. Barcelona tops the list of the most expensive provinces, followed by Madrid, Baleares, and Guipúzcoa. On the opposite end are provinces like Jaén, with 5.5 euros per square meter, being the most economical for renting.
All autonomous communities experienced price increases in 2023. Baleares leads with an 18.3% increase, followed by Comunitat Valenciana (15.5%) and Andalucía (13.1%). Madrid continues to be the autonomous community with the most expensive rentals, reaching 16.2 euros per square meter.
Given this landscape, the upcoming year is crucial for Spain’s rental market. There is a clear need for a more balanced approach and open dialogue among all stakeholders.
Jaume Domingo, CEO, and Founder of Living Sitges, believes that authorities must consider measures to foster market stability, avoiding an even more precarious situation in 2024. Sitges, with its moderate growth rate, is not as adversely affected as other cities that have experienced a much more drastic increase. However, vigilance is necessary, as the supply continues to evaporate with no signs of increasing in 2024, and prices are hitting historic highs in most markets. The constant regulatory measures regarding rentals and the culmination with the approval of the Housing Law last May caused the current upheaval: the disappearance of investors in rental housing and a significant withdrawal of property owners who have decided not to continue renting their homes due to regulatory instability and being considered part of the problem, despite being a crucial part of the solution. Therefore, many of the owners who still remain in the market are opting for seasonal rentals to keep their properties in circulation, tightening conditions and seeking reliable tenants.
The measures taken to reduce prices and protect the most vulnerable families have resulted in the opposite effect: the supply is more restricted than ever, prices are at historic highs, and the most vulnerable tenants are left completely unprotected.
Article by Living Sitges Real Estate