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Cost of Renting Reaches Historical Highs

Renting is more expensive than ever
Cost of rental housing is more expensive than ever

Renting is more expensive than ever before!

The price of rental housing in Spain increased by 0.9% in July, when compared to the previous month. When compared to the same month in the previous year, rental prices have increased 7.4%. This brings the average cost per square metre to €11.21. The average cost exceeded €10 per square metre some 33 months ago, and this latest increase brings the price to the highest ever recorded.

Rental prices reached the historical maximum level, with an upward trend. It has been recovering ground for nine consecutive months – it came out of the negative period of 2021 – and presents the biggest increases since records exist. It is a moment that marks a milestone in the evolution of this market. In addition, the increases in some hot spots of the Valencian autonomy, which also presents unprecedented increases, as well as in Catalonia, Madrid and Andalusia, are very significant. The main cause that pushes the price up is the very important reduction in supply that has already been detected since the beginning of the year and the incessant increase in inflation that influences the price of homes that come onto the market“, explained María Matos, director of Studies at Fotocasa.

Increases in All Autonomous Communities

If we look at rental prices compared to those of a year ago, we see that all the communities saw an increase in the year-on-year price in July. In six communities we saw double-digit increases, specifically in the Valencian Community it exceeded 15% year-on-year. The order of the areas of Spain with interannual increases is: Valencia (17.5%), the Balearic Islands (14.5%), Cantabria (14.0%), Region of Murcia (13.9%), the Canary Islands (12.7%), Madrid (11.2%), Castilla y León (9.4%), La Rioja (8.8%), Extremadura (8.6%), Galicia (7.9%), Castilla- La Mancha (7.8%), Navarra (7.8%), Catalonia (7.3%), Andalusia (5.0%), Asturias (3.7%), Aragon (3.4%), and the Basque Country (2.7%).

In July 2022, seven communities exceed national average prices per square meter per month. The areas of Spain with the highest prices in the entire historical series are the Balearic Islands (€13.20/m² per month), Cantabria (€11.18/m² per month), the Canary Islands (€10.83/m² per month), Navarra (€10.36/m² per month), Region of Murcia (€8.51/m² per month), Castilla y León (€8.00/m² per month) and Extremadura (€6.21/m² per month).

Regarding the ranking of Autonomous Communities by the price to rent a home in Spain, Madrid and Catalonia are in the first places, with prices of €15.39/m² per month and €14.79/m² per month, respectively. They are followed by six more communities with prices above €10.00/m² per month and they are: the Basque Country with €13.51/m² per month, the Balearic Islands with €13.20/m² per month, the Canary Islands with €10.83/m² per month, Navarra with €10.36/m² per month and Valencia with €10.00/m² per month.

Provinces of Spain

Almost all provinces saw an increase in the year-on-year price of rental housing in July 2022, except Guadalajara. Increases of more than 10% occurred in 20 provinces and specifically, three of them experienced increases of more than 20%.

The order of the provinces with year-on-year increases of more than 10% are: Girona (20.3%), Huelva (20.3%), Málaga (20.2%), Alicante (18.8%), Cuenca (15.8%), Valencia (15.6%), Balearic Islands (14.5%), Las Palmas (14.3%), Cantabria (14.0%), Lugo (13.9%), Murcia (13 .9%), Cádiz (12.4%), Badajoz (12.2%), Huesca (11.8%), Madrid (11.2%), Castellón (10.8%), Lleida (10.7%), Tarragona (10.5%), Palencia (10.3%) and Segovia (10.1%).

As for prices, 14 provinces exceed 10.00 euros per square meter per month for rental housing. The three most expensive provinces are Barcelona with €15.77/m² per month, followed by Gipuzkoa with €15.52/m² per month and Madrid with €15.39/m² per month.