Spain's new Housing Law is dominating real estate conversations across the country and beyond. At the recent real estate fair Sima, the vast majority of the speakers were opposed to the implementation of this law. One of the most critical was Antonio de la Fuente, managing director at Colliers, who referred to the supposed facilities that squatters will find thanks to the law. "There is already a rumour in the English speaking market that your property can be squatted in Spain and nothing will happen to fix it," he said.
"The Housing Law tries to attack the problems when it comes to property for sale, but for rental housing it is going to be a real drama. It is a short-sighted measure that only seeks to attack the problem of built housing, but not for future housing. Build to rent is a relatively new product. Now this sector is suffering due to the rise in interest rates and now we are aggravating it with the Housing Law, which will have an immediate effect. Investors who were thinking of coming to Spain are thinking about it and are not coming, and those who are already here have to justify many things in their companies and will invest less," he adds.
The director of the consultancy firm Colliers is also sceptical about the rent price control because he understands that it is not going to be applied throughout the country. "It is going to provoke a polarity of investment. There will be areas where there will be no investment at all and other areas where there will be because the Autonomous Community does not apply the law. In addition, individuals will be scared and will sell their homes instead of renting them," he said.
For his part, Jorge Pereda, director of residential rental of Grupo Lar, presented some data on the rental market in Barcelona to justify his rejection of price controls on rent. "From December 2022 to today, the price has risen by 46% and the supply has fallen by 60%. This is an example of how to regulate in a different way", he explained.
Federico Bros, investment director of Tectum Real Estate in Spain and Portugal has pointed to the increase in interest rates as the main threat to the rental business in Spain. "Interest rates will continue to rise to 4.25 in August. Core inflation is not under control. As long as this is not controlled, banks have to raise rates. This year is going to be a very soft year in investment because nobody has the magic ball to know when interest rates are going to stop rising. We are going to have to wait a while to see activity in the market," he said.
There is a supply and demand price mismatch of around 20%. "It's a time to make decisions with the objective of being defensive, turning it into an opportunity for investments that haven't had the opportunity to buy assets that they haven't been able to buy in the last seven years," added Bros.