The cost of renting housing in Spain increased by 3.5% in January to stand at €8.44 p/m² per month. This is the largest monthly increase since March 2007 when the monthly variation was 6.3%.
On a monthly basis, the cost of renting increased in 15 communities and decreased in two. The highest increase was recorded in La Rioja (5.9%). This was followed by increases in the Balearic Islands (5.3%), the Canary Islands (5.1%), Madrid (4.8%) and Catalonia (4%).
“Rental prices continue to grow as a result of increased demand, economic recovery and improvements in employment, as well as the inability of many Spaniards to access the purchase of a home. But other factors also influence the market, such as a change of mentality in favour of renting, and the tourist rental boom in the big cities and main coastal destinations,” explains Beatriz Toribio, director of studies de fotocasa.
The average cost of renting in January returns us to prices similar to those seen in March 2010. Back then, the rental price stood at €8.42 p/m² per month. Since reaching the maximum price in May 2007 (€10.12 p/m² per month) the price of housing has accumulated a fall of -16.6%. This follows a similar pattern to the prices of property for sale. Despite regular increases over recent years, prices are still well below the peaks seen before the financial crisis.
Year-on-Year Variation Positive in All Communities
On a year-on-year basis, the price of rental housing increased by 10.9%, very much in the trend of the last months in which year-on-year increases have been close to 10%. In fact, this is the fifth month in the last year in which rental prices has increased above 10%. Additionally, rental prices on a year-to-year basis have increased for 35 consecutive months.
In January, there were year-on-year increases in all autonomous communities, with increases ranging from 13.1% in La Rioja to 0.3% in Navarre. The cost of renting a home in Andalucia increased by 6%, when compared to the previous January.
Catalonia is the most expensive community to rent a second-hand home, with an average price of €12.88 p/m² per month. It is followed by Madrid (€12 p/m² per month) and the Basque Country (€10.91 p/m² per month). Extremadura (€4.65 p/m² per month) and Castilla-La Mancha (€4.96 p/m² per month) are the communities with the lowest rental prices.
35 provinces registered monthly increases in rental prices with respect to the month of December. Those increases ranged from 6.4% in Malaga to 0.2% in Albacete. Rental prices fell in 14 provinces with decreases ranging from -8.8% in Castellón to -0.1% in Jaén.