The pandemic has impacted the rental market: in July, for the first time since the brick crisis, renting a house in the six largest Spanish cities was cheaper than the previous month. The unanimity is almost absolute in the real estate portals, according to a comparison with the latest published figures and, in the case of Fotocasa, with data first advanced by EL PAÍS. Barcelona is the one that suffers the greatest adjustment, which has caused a surprise : Madrid is now more expensive, according to two of the three sources consulted. But the capital is not spared of the descents, as neither Valencia, Seville, Zaragoza or Malaga.
Idealista's records place all Spanish cities with more than half a million inhabitants in negative numbers, something that had not happened since November 2013. According to Fotocasa, the six large cities also became cheaper in July. Although the data are disparate because each portal uses different bases and methodologies, the range of monthly falls ranges from 0.6% to 3.1%.
The rental market in July
Variation in percentage:
Monthly (June-July 2020)
Annual (July 2019-July 2020)
0
8
-10
-8
-6
-4
-two
two
4
6
Spain
+0.10
Idealistic
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
-1.70
+1.50
–3.10
–2.40
–2.60
+2.70
–3.00
+2.90
–0.60
+3.4
-1.80
+2.20
-0.80
Fotocasa
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
-1.70
–0.20
–2.50
–3.60
+2.30
-1.80
–2.00
+4.00
-1.60
+0.5
-1.70
-1.20
-1.52
Pisos.com *
–4.51
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
–3.54
–4.09
–9.34
–1.35
-8.67
–0.13
-1.08
–1.15
+1.67
+0.93
-9.45
(*) to find the price per m2, the data has been divided
of income and average surface offered by the portal
Source: Data from the portals and own elaboration
THE COUNTRY
The rental market in July
Variation in percentage:
Monthly (June-July 2020)
Annual (July 2019-July 2020)
-10
-8
-6
-4
-two
0
two
4
6
8
Spain
+0.10
Idealistic
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
-1.70
+1.50
–3.10
–2.40
–2.60
+2.70
–3.00
+2.90
–0.60
+3.4
-1.80
+2.20
-0.80
Fotocasa
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
-1.70
–0.20
–2.50
–3.60
+2.30
-1.80
–2.00
+4.00
-1.60
+0.5
-1.70
-1.20
-1.52
Pisos.com *
–4.51
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
–3.54
–4.09
–9.34
–1.35
-8.67
–0.13
-1.08
–1.15
+1.67
+0.93
-9.45
(*) to find the price per m2, the rent data have been divided
and average surface offered by the portal
Source: Data from the portals and own elaboration
THE COUNTRY
The rental market in July
Variation in percentage:
Monthly (June-July 2020)
Annual (July 2019-July 2020)
-10
-8
-6
-4
-two
0
two
4
6
8
Price
euros / m2
Monthly variation in Spain
+0.10
Idealistic
16.30
16.20
9.10
10.30
8.40
10.10
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
-1.70
+1.50
–3.10
–2.40
–2.60
+2.70
–3.00
+2.90
–0.60
+3.4
-1.80
+2.20
Fotocasa
-0.80
16.31
16.78
9.96
10.30
8.87
10.14
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
-1.70
–0.20
–2.50
–3.60
+2.30
-1.80
–2.00
+4.00
-1.60
+0.5
-1.70
-1.20
Pisos.com *
-1.52
–4.51
17.89
17.55
9.33
10.85
8.29
10.27
Madrid
Barcelona
Valencia
Seville
Saragossa
Malaga
–3.54
–4.09
–9.34
–1.35
-8.67
–0.13
-1.08
–1.15
+1.67
+0.93
-9.45
(*) to find the price per m2, the average rental and surface data offered by the portal have been divided
Source: Data from the portals and own elaboration
THE COUNTRY
There is more variety in the Pisos.com statistics: from a 4.51% drop in Madrid to a 0.93% rise in Malaga. The Andalusian city precisely breaks the unanimity, but only in the Pisos.com data. This portal, however, places it as the one that suffers a year-on-year decrease (from July 2019 to the same month of this year), of 9.45%.
The fundamental cause of the generalized falls - according to Pisos.com, in July there were monthly setbacks in 28 of the 50 provinces, and year-on-year falls in another 24 - is the coronavirus pandemic. The changes it has brought about in supply and demand have led to unusual drops since the crisis of the past decade. In Spain as a whole, two of the three portals consider that the flats became cheaper in July and the third, Idealista, barely recorded a 0.1% rise.
"As the market is practically closed for three months, homes have accumulated like never before," says a source from Idealista. "The houses that were good, before were rented in hours, and those that were at market price, at most in two weeks," he adds. That is to say, now on the web there is more offer because the slowdown in operations has caused a lower rotation of the ads.
Something similar happens on the street. Xavi Perramon, from the committee of the Barcelona Association of Real Estate Agents, describes “an avalanche of work” at the beginning of the de-escalation. But that situation has happened: "It is as if they were the floodgates of a swamp: now things have calmed down and there are some apartments that, even with prices that are not very high, have stopped us."
More free floors
Finques Perramon manages about 1,000 rental properties and Xavi Perramon, who belongs to the fifth generation of the company, says that the epidemic has caused an unusual increase in people who leave the house before the end of the rental contract or do not renew it. "These last two months we have not been able to rent everything that has been released," he sums up.
Another cause of the increase in supply is the arrival on the market of tourist apartments. A recent study by Pisos.com, which has a small vacation rental section, found that between March and mid-July there was a transfer of this type of ads to residential leasing of 20%. That is, one out of every five houses. The portal calculates that its offer to rent a habitual residence in July was 31% higher than in April.
Tourist apartments did increase the supply, but that did not lower prices quickly. "These homes entered the residential market with significantly higher prices due to their perfect condition," explains Fotocasa's Communication Director, Anaïs López. "In the coming months they will have to adjust prices to adapt much more to the needs of the rental market and it is possible that many will return to the tourist market as soon as tourist activity resumes with some normality", he adds.
Year-on-year drops
If the interannual variations are analyzed, both Fotocasa and Idealista agree that the national average was even more expensive this July than last year. But the situation changes in the big cities. According to Idealista, Barcelona is cheaper than a year ago. Fotocasa also places Madrid and Malaga in that position. For Pisos.com, except for Zaragoza (the cheapest and the one that has risen the least lately), the other five already show year-on-year falls. The data is not homogeneous: each portal uses its system, all based on the offers and not on the prices at which the operations are closed. But they do allow you to follow the evolution and trend of this market.
López rules out sharp falls, something that other market players agree on. "Obviously, prices in the short term are going to suffer because it is pointing to a strong crisis and that has to be reflected in the market", indicates Beatriz Toribio, general director of Asval, an association that groups 600 homeowners who add up to 35,000 homes. But Toribio doubts that large rents will drop in large cities and is betting that "demand will continue because accessing a home for purchase will be more difficult."
Jaime Palomera, spokesman for the Barcelona tenants union, points out other reasons that support prices "very high for what has happened." "The demand cannot change housing like someone who changes their smartphone," he points out. Palomera points out the fear of asking for discounts for a "legislation that makes the tenant live in fear of being kicked out" at the end of the contract. And he adds that housing, in addition to being a basic commodity, "is a home." "This is linked to your work, the school where your children go and other factors that make many people not feel like moving," he concludes.
Information about the coronavirus
- Here you can follow the last hour on the evolution of the pandemic
- This is how the coronavirus curve evolves in Spain and in each autonomy
- Search engine: The new normal by municipalities
- Questions and answers about the coronavirus
- Guide to action against the disease
