The permanent rental stock in Catalonia drops 13% after price controls

The reduction in permanent rental supply in Catalonia has gained new momentum after Housing Law price controls came into force on 16 March: the stock has fallen by 13%, according to an idealista study.

The decline has also been widespread among the Catalan provincial capitals, with double-digit declines in a single month in most of them: in Girona, the number of available rentals has fallen by 21%, while in Tarragona supply was down by 16% and 14% in Barcelona city. In Lleida, however, the fall in stock was 9%.

The trend is similar among the Catalan provinces, with significant supply reductions in all of them. Barcelona has been the most affected by the price control, with families looking for a rental property in the province finding -14% less supply than before it came into force. It is followed by Tarragona (-10%), Girona (-7%) and Girona (-5%).

For this report, idealista has exceptionally used specific weekly metrics (instead of the quarterly methodologies normally employed) to estimate the impact that price controls have had over this time, especially as they came into effect in the last 15 days of the quarter. We know that using such short periods as a sample may be less stable, so we consider these data as an estimate that will have to be confirmed by the successive analyses with quarterly data published later this year.

Seasonal rentals are already 30% of Barcelona's rental market supply

Seasonal rentals seem to have become the preferred option for many landlords, but their relative weight in the market has remained stable at the same levels as before price controls were introduced. In Barcelona, according to published quarterly data, around 30% of the available supply is already seasonal, while in Girona and Tarragona, it remains at 10% of the market. In Lleida, it only accounts for 2% of the properties listed.

Impact on prices

The implementation of price controls has not had an immediate effect on prices, at least not in Barcelona, where the price of permanent rental housing analysed using this specific methodology has increased by 4.6%. In Girona, prices have remained stable, while decreases have been recorded in Lleida (-2.8%) and Tarragona (-1%). In Catalonia as a whole, prices increased by 4.3%, with Girona being the province where prices rose the most: 6.4%. This was followed by increases in the provinces of Barcelona (5%) and Tarragona (0.4%). In Lleida province, prices fell by 0.8%.

For idealista spokesperson, Francisco Iñareta, "These data clearly show that experts' unanimous consensus was neither wrong nor ill-intended, but was based on what happened in other markets. Insisting that we must wait for the housing law's policies to be implemented, specifically price controls will only aggravate the already desperate situation of thousands of Catalan families, who will see how the difficulty and competition for housing will increase in the coming months. Undeniably, the origin of the rental problem in Spain lies in the very limited supply available, which is why a change is essential to rebalance tenant and landlord relations, accepting that landlords are not the problem but the solution to increasing supply and adjusting prices".

Data compiled and analysed by idealista/data, idealista's proptech, which provides information for a professional audience to facilitate strategic decision-making in Spain, Italy and Portugal.  It uses all the idealista database parameters in each country and other public and private data sources to offer valuation, investment, recruitment and market analysis services.