Housing Rental Market in Spain

Housing Rental Market in Spain When it comes to the housing market in Spain, there seems to be no end to the problems. The rental prices for residential properties have spiked in all the major cities and the worst hit are the cities of Barcelona and Madrid and the Balearic Islands, the hubs of Spanish residential sectors. Spain’s Balearic Islands penalise landlords for illegally renting apartments to tourists with fines of up to 40,000 euros ($47,228) amid a backlash against the effects of mass tourism across the country. Rent in the Catalan capital rose by €17.4/sqm/month on an average i.e. almost by 18.5% compared to the rents a year ago. Rental prices also rose sharply in Madrid by 14.6% in the third quarter of 2015 to €13.8/sqm/month (according to Idealista’s latest report). In a recent article published in the Spanish daily El Periodico, Carloz Marquez presented an analysis of the rental market in Barcelona. Marquez’s data showed that 20% of the accommodation listed is rented within 24 hours, 44% in a week and 78% in a month. Major Problems Existing in the Rental Property Market Illegal Subletting Most apartment owners in Barcelona often complain about the major issue of illegal subletting. It has often been observed that people pose as long-term tenants while renting properties. Later, these properties are illegally sublet to tourists for a short time-span through vacation accommodation sites such as Airbnb. This way the original tenants earn almost triple the cost of the actual rent. Airbnb has specified that anybody who lets out a property needs to have an individual profile. Moreover, any person who uses Airbnb to rent out properties must also register themselves with local authorities. Despite these strict regulations, still, people have more than one profile registered on the Airbnb site. The unfortunate part is that the homeowners are fined and not the tenants rent out rooms and who actually breach the rules. This is indeed a nightmarish scenario for landlords that make them more apprehensive when they rent out their properties. In the Balearic Islands, which drew more foreign visitors than any other region in Spain, rental costs have jumped and there are fears of a housing shortage for residents. Rental prices in Palma de Mallorca, the Mediterranean archipelago’s biggest city, have risen 40 percent in the last five years, according to property platform Mitula. The island of Ibiza has the biggest density of Airbnb rentals, with a tourist apartment for every 30 residents, data from analytics firm Airdna showed. Renting out apartments without a licence was banned in the Balear Islands in 2012 under a previous administration but enforcement was largely nonexistent, according to the Balearic government. The new legislation establishes fines of between 20,000 and 40,000 euros for those offering short rentals without a license to tourists. Local residents will be able to report suspected illegal flats through a website, and online platforms such as Airbnb and HomeAway could also face fines if they are found to advertise rentals without a license number. Online Rental Scams Online rental scams have become a pressing issue in the present day rental market in Spain. Criminals often dupe people by showing them images of properties that are simply copied from other websites. Such properties could be non-existent or may have already been rented out. Properties for rent are advertised on free online platforms such as Gumtree, which only asks renters to verify their phone numbers and email addresses. Once prospective tenants show interest in a listed property, they are instructed to pay a token amount to make a booking. The moment the transaction is completed, the fraudster in the garb of the landlord deactivates their email address. High Deposits According to the Spanish rental law, the minimum deposit that you are required to pay is a month's rent for apartments without any furniture and two months deposit for accommodations that are fully furnished. Many landlords may also ask for six months' payment as a guarantee. However, you can always try to negotiate and try to pay for just two or three months. As per Spain’s new rental law, landlords can now evict tenants who don’t pay their rent after six weeks instead of six long months that was the norm earlier. Those who are compelled to look for a rented accommodation in Spain come to terms with the enormous demand as they witness properties getting rented in a matter of hours. Airbnb said the new rules were complex and confusing as they did not distinguish between local families sharing their homes and professional operators running a business. It said it was ready to collaborate with the local authorities on establishing clearer regulation. “By working together, we can help build sustainable tourism models that spread benefits to many - not keep them in the hands of a few,” the firm said in an emailed statement.

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