The cost of renting property has increased by 8.8% in the first quarter of 2018, to 10.60 euro/m2 (1 euro/sq ft) per month. According to the report on rental prices published by idealista, all the autonomous regions in Spain recorded increases between January and March. However, rents seem to peak in large cities, with less pronounced increases in Barcelona (0.8%), Seville (1.9%) and Madrid (2.7%).
According to Fernando Encinar, Head of Research at idealista, "during this quarter the biggest increases have gone from the big markets, where the rent seems to have reached a sort of ceiling, to other capitals where until now the impact of the increases had been less, like Cuenca, Girona, Zaragoza or Guadalajara. In cities such as Malaga and Alicante, owners have already started to lower their rent and Barcelona has also seen drops in its interannual progression. The data show that the natural rental ceiling in Spain is within the real possibilities of the potential tenants and not in the intervention of the market, an attempt that has already been tested in Paris and Berlin, with very bad results.
"There are better ways to normalise the prices: encourage owners of empty houses to put them on the rental market by guaranteeing legal coverage and legislative certainty, promoting public-private housing rental projects on public endowment land, tax breaks, aid for refurbishment of houses destined to be rented out, zero tolerance of squatting, express licenses for changes of use of other types of properties (such as warehouses or commercial properties) so that they can be renovated and made liveable... any measure, however creative it is, should be taken into account to significantly increase the supply of housing, helping to create a more reasonable price situation," adds the Head of Research idealista.
The average rental price in Spain increased to 18.2% year-on-year compared to the January-March 2017 period. The Canary Islands (26.6%) and the Balearic Islands (18.2%) had the highest increases, while the Community of Madrid (9.6%) and Catalonia (6.2%) grew more moderately.
The large provincial capitals had a mixed cycle over the last year. While Madrid increased by 7.8%, Barcelona fell to 2.7% year-on-year. The biggest increases of the year were in Santa Cruz de Tenerife (24.3%), Girona (19.4%) and Las Palmas de Gran Canaria (19.2%).
All the autonomous communities have higher prices than they did three months ago. The largest increase was recorded in the Balearic Islands, where the price rose by 12.1%. This was followed by increases in Cantabria (7.2%), Aragon (6.7%), Castile and Leon and the Valencian Community (4.8% in both cases). The smallest increases, however, were observed in La Rioja (1.4%), Navarra (1.5%), Castile-La Mancha (2.3%) and Catalonia (2.4%).
Madrid and Catalonia are the most expensive communities for renting a property, with 14.80 euro/m2 or 1.37 euro/sq ft in both cases. The Balearic Islands follow (14 euro/m2 or 1.30 euro/sq ft) and then the Basque Country (11.60 euro/m2 or 1.07 euro/sq ft) and the Canary Islands (9.50 euro/m2 or 0.88 euro/sq ft). At the other end of the ranking come Extremadura (4.20 euro/m2 or 0.39 euro/sq ft), Castile-La Mancha (4.80 euro/m2 or 0.44 euro/sq ft) and La Rioja (5.20 euro/m2 or 0.48 euro/sq ft), the most economic communities.
38 provinces saw their prices rise over the winter. The largest increase was registered in the Balearic Islands, where prices increased by 12.1%. The increases recorded in Huelva (9.6%), Zaragoza (8.5%), Cuenca (7.6%) and Cantabria (7.2%) were also significant. The largest drop occurred in Tarragona (-7.9%), followed by Granada (-3.3%) and Lleida (-2.9%).
The ranking of the most expensive provinces is headed by Barcelona (16 euro/m2 or 1.48 euro/sq ft per month), Madrid (14.8 euro/m2 or 1.37 euro/sq ft) and the Balearic Islands (14 euro/m2 or 1.30 euro/sq ft). Cáceres is the cheapest province for renting a house, at 4 euro/m2 or 0.37 euro/sq ft per month. It is followed by Ávila (4.20 euro/m2 or 0.39 euro/sq ft) and Zamora (4.3 euro/m2 or 0.40 euro/sq ft).
Cuenca and Girona are the provincial capital cities in which the rental price has increased the most during the last quarter, with an increase of 7.4% in the rental of their homes in both cities. There was also a considerable increase in Zaragoza, where they rose by 6.9%, followed by Guadalajara (5.9%). In Madrid the price rose by 2.7% while in Barcelona the increase was 0.8%.
On the opposite side is Tarragona, where owners are asking for 4.6% less than last quarter to rent their homes. This was followed by the decreases in Granada (-4.5%), Pontevedra (-2.5%), Malaga (-2.2%) and Leon (-2.1%).
Barcelona is the most expensive capital city (17.60 euro/m2 or 1.63 euro/sq ft), followed by Madrid (15.90 euro/m2 or 1.47 euro/sq ft) and San Sebastian (14.60 euro/m2 or 1.35 euro/sq ft). At the bottom of the table are Zamora (4.50 euro/m2 or 0.41 euro/sq ft), Cáceres (4.60 euro/m2 or 0.42 euro/sq ft) and Ávila (4.70 euro/m2 or 0.43 euro/sq ft), the cheapest capitals.
The idealista property price index
idealista is currently the most used property marketplace in Spain for buying, selling and renting. With thousands of properties currently for sale, the research department at idealista has been analysing real estate prices since 2000. With eighteen years of research under its belt, idealista has become the standard source of data for countless analysis teams from banking and financial entities to public institutions.
To put together this property price index, idealista has analysed 54,323 property listings which were advertised on their database in March 2018. To ensure the data is correct, properties which were previously priced outside of the market have not been counted in the analysis, as have single-family homes because they skewed the results in some areas. The price is not offered for municipalities with less than 50 properties, as the sample is not sufficient. idealista’s property price index is compiled using offer prices per built square metre. The complete report is available to download in Spanish.