One of the first consequences of the pandemic and the state of emergency on the property market was a sharp rise in the supply of rental homes. This was driven primarily by the standstill caused by lockdown, during which virtually no rental transactions were completed for three months and properties accumulated in idealista's database.
The bottleneck was most pronounced in the most dynamic markets, where housing turnover was considerably higher, whilst those markets with little activity barely registered the slowdown. Against this backdrop, and with prices falling as supply built up, many households were prompted to rent or move to a property that better suited their needs.
Five years on – the length of a standard contract with an individual landlord – many of those homes are returning to the market at prices 40% higher than at the end of 2020, yet in a vastly different landscape: available supply is 61% lower and competition among renters has surged by 483% over the same period, according to a study published by idealista.
The steepest drop in supply has been recorded in Barcelona, where nine in every ten homes listed in 2020 are no longer available – a 90% reduction in five years. It is followed by Granada (-76%), Palma (-75%), Madrid (-73%), San Sebastián (-72%), Las Palmas de Gran Canaria (-72%), Seville (-72%) and Bilbao (-70%).
Also recording drops of more than 50% are Málaga and Girona (both -69%), Oviedo (-66%), Cádiz and Valencia (both -65%), Tarragona (-59%), Salamanca (-58%), Alicante (-54%), Córdoba (-53%) and Santander (-51%).
At the other end of the scale, seven Spanish provincial capitals have more rental properties available now than at the end of 2020: Cuenca (+113%), Ceuta (+67%), Lugo (+35%), Segovia (+23%), Cáceres (+18%), Badajoz (+8%) and Jaén (+5%).
Competition skyrockets
This contraction in supply has fuelled a sharp rise in competition among households vying for the few homes that come onto the market. The steepest increase has been recorded in Lleida, where competition has grown elevenfold, or by 1,050%. It is followed by Palma (1,041%), Burgos (976%), Barcelona and Granada (both 917%), Bilbao (864%) and Salamanca (839%). In Madrid, competition has risen by 558% over the same period.
No provincial capital has seen competition fall, though the smallest increases have been recorded in Ceuta (134%), Cuenca (141%), Pontevedra (178%), Lugo (203%) and Badajoz (210%).
Prices on the rise
Rising demand and shrinking supply have driven prices up across all markets. Households entering the rental market today will find prices 82% higher than five years ago in Valencia, followed by Alicante (73%), Segovia (71%), and Barcelona and Palma (both 63%). Other notable increases include Málaga (62%), Santa Cruz de Tenerife (58%), Guadalajara (57%), Madrid (54%) and Ávila (51%).
At the other end of the scale, the smallest price rises have been recorded in Bilbao, San Sebastián and Melilla – all up 22% – followed by Huesca (23%), Vitoria (24%), Córdoba (25%) and Pamplona (26%).
