A recent article in the Spanish daily El Periodico takes a look at the rental market in Barcelona, where rents are rising but are still remarkably cheap by international standards.
What are the factors driving up residential rental prices in Barcelona, where they rose the most in all Spain last year, asks Carlos Márquez, writing in the Spanish daily El Periódico in an article ‘Barcelona, ciudad sin pisos (de alquiler)’ – or in English ‘Barcelona, city without flats (for rent)’.
Average rents in Barcelona rose 6.7% last year, from 688 €/month to 735 €/month, though that still leaves them 10% below the boom-time high of 813 €/month hit in 2008.
BARCELONA’S HOUSING STOCK
Márquez digs into the statistics of Barcelona’s housing stock to help us understand the supply side. Barcelona city has 811,106 homes in total, of which 655,175 are classified as first homes for a population of 1.6 million. But 200,000 homes have only one occupant, whilst 192,000 have two occupants. That implies 79% of main homes have three occupants at most, he explains.
Also making demands on the city’s house stock are 9.600 legal tourist flats, and many more illegal ones, whilst the number of hotels has gone up from 236 in 2007 to 380 today (a 60% increase), which also reduces the supply of homes.
So the housing stock of main homes is sparsely populated, whilst tourism is placing rising demands on the city’s capacity to offer accommodation, putting pressure on the supply.
Barcelona can’t build its way out of a growing supply crunch. In the city’s 100 km2 surface area there are 21% more homes than in 1981, but no room for more, explains Márquez. “Thanks to orographic boundaries and the lack of land, there is not much margin for creating new housing, especially in the most sought-after areas,” he writes.
SHORTAGE OF HOMES FOR RENT
Rents are rising with demand, but most of all because of a shortage of homes for rent, say local Barcelona property market experts consulted by Márquez. “We are getting many fewer [flats to rent] than before,” says Guifré Homedes. Just a year ago it took on average two and a half months to find a tenant, now that is down to 60 days. “Our problem is supply, not demand,” he says.
ANALYSIS OF RENTAL PROPERTY ‘TIME ON MARKET’
Márquez analysed data from the Spanish property portal Idealista.com to show how the Barcelona rental market is heating up.
> 20% of flats listed for rent in Barcelona are taken within 24 hours, up from 9% a year ago.
> 44% are taken within a week, up from 32% last year.
> 78% are gone within a month, up from 70%.
> Eixample, Ciutat Vella and Sant Martí are the areas where flats for rent spend the least time on the market.
BARCELONA CHEAP BY INTERNATIONAL STANDARDS
The article also gives us data comparing average rental prices in Barcelona with other leading cities around the world. Despite rents rising the most in Spain last year, there’s no denying that Barcelona still looks like a cheap place to rent a home by international standards. Average rents are less than half Paris, less than a third of London, and less than one fifth of New York. Barcelona is also significantly cheaper than Madrid.
If Barcelona rents are cheap by international standards, that begs the question how long will they remain so with a growing shortage of homes for rent and rising demand, especially foreign demand? Many estate agents in the city report that foreign demand for property in Barcelona, both rental and purchase, has been growing significantly in recent years.
“It could be that we end up importing the model of cities like Paris and London, where the centre is occupied by businesses and tourists and many residents live in the suburbs or dormitory towns,” muses Homedes.
RENTAL PRICES BY DISTRICT
The map below shows the average rental price in each of Barcelona’s 10 city districts. For a detailed graphical analysis of rental prices by district in Barcelona (in Spanish) click here.
Source: Spanish Property Insight