The price of rental housing in Spain increased by 2.4% during the second quarter of 2018. This brings the average price per square metre to 10.8 euros per month, according to the latest data from idealista. When comparing to the same period in 2017, the increase reaches 15.6%.
“It is true that we are experiencing a general increase,” says Fernando Encinar, head of studies for idealista. “but in no case can we speak of a bubble, since by definition these only occur when an asset is purchased and not when it is leased. In renting, the price has a ceiling (wages) and if prices exceed wages then demand falls away irremediably until the prices lower. But we must be aware that there will be areas within the big cities where the price will continue to rise, because supply is scarce.
“Further to this, the data already shows that in the markets where prices began rising early and more strongly, downward adjustments are already being made, as is the case in Barcelona, while in other areas the increases are beginning to slow. There are voices demanding limits on rental costs but these are unlikely to materialise. In fact, in other European cities where caps have been set, such as Paris or Berlin, the limits have proved ineffective, in addition to doubts over their legality, since all they have achieved has been to eliminate product from the market and generate a black market for overpricing.”
All the communities saw prices increase during the second quarter, except Catalonia, where costs for renting housing fell by 0.2%. The highest increase was seen in Murcia, where prices increased by 8.5% during the spring. Other significant increases were seen in La Rioja (8.4%), Navarra (7.7%), Cantabria (6.4%), the Balearic Islands (6.1%), Valencia (6%) and Andalucía (4.9%).
The highest costs are seen in Madrid where the average cost per month is 15 euros/m². It is followed by the Balearic Islands (14.8 euros/m²), Catalonia (14.7 euros/m²), and Euskadi (11.8 euros/m²).
At the other end of the table we find Extremadura (4.4 euros/m²), Castilla-La Mancha (4.9 euros/m²), Galicia and La Rioja (5.7 euros/m² in both cases), which are the cheapest communities for rental housing.
44 provinces have seen the cost of rental housing increase during the spring. The biggest upturn was registered in Huelva, where prices have increased by 13.7%. The increases registered in Murcia (8.5%), La Rioja (8.4%), Palencia (8.3%), Navarre (7.7%), and Málaga (5.8%) were also significant. The biggest drop was in Ciudad Real (-2.2%), followed by Zamora (-2.1%) and Barcelona (-1.1%). In Madrid, prices rose by 0.8%.
The ranking of the most expensive provinces is headed by Barcelona (15.8 euros/m² per month). Following are Madrid (15 euros/m²) and the Balearic Islands (14.8 euros/m²). Jaén is the most economical province to rent a house, with an average price of 4 euros/m² per month. They are followed by Zamora and Cáceres (4.2 euros/m² in both cases).
In Lugo, owners increased the price of their rental properties by 9.4% during the second quarter. Pamplona saw prices increase by 7.6%, while in Murcia prices are now 7.5% higher than they were three months ago. In Madrid the price increased by 1.2%. Girona marks the biggest fall among the 15 capitals that have reduced their prices this spring (-4.3%). It is followed by falls in Albacete (-2.4%), Santa Cruz de Tenerife (-2.2%) and Barcelona (-2.1%).
Barcelona is the provincial capital with the most expensive rental housing (17.2 euros/m²), followed by Madrid (16.1 euros/m²) and San Sebastian (15.4 euros/m²). Looking at the bottom of the table we find Zamora is the cheapest capital with a price of 4.5 euros/m², followed by Cáceres (4.8 euros/m²), Ávila and Ciudad Real, with 4.9 euros/m² in both cases.