One thing that worries a lot of people living in Barcelona, is its rental prices. Having a roof over your head is a necessity, so you must at least be able to afford that.
Unfortunately rental prices in Barcelona have increased tremendously, which leaves little room for mileuristas (people that have a salary of around one thousand euro’s per month) to rent an apartment. The only option for them is to find a guarantor to support them.
As every downside has its upside, people who benefit from Barcelona’s rental market are small investors who buy real estate to rent it out to others, or people who, besides having their own home, also own a rental apartment to earn extra income.
Some people are suggesting that rental prices for long term apartments should be lowered, but is this even possible? And when can this be brought into effect? Read this analysis by ShBarcelona if you are interested in the subject.
Related article: Where to Find Affordable Housing in Barcelona
Rental price development in Barcelona
First of all it is important to take not of the fact that recent numbers show that the increase of rental prices has not been as steep as expected. Rental prices increased with 9.3% on a national level in 2018, but in the last quarter prices decreased with 0.6%.
Even in Madrid and Barcelona, where rental prices have risen the most, they are now at the same level as before the crisis, and increases seem to further slow down. According to experts, we are entering the stage of “normalization”, which will lead to rental prices being adjusted.
Experts also agree that the reason for these falling prices, at least concerning rentals in the Catalan capital, can be attributed to foreign buyers who are reluctant to buy in a state of political instability. This can primarily be noticed in the high-end market, which weighs heavily on average rental prices in the city.
Related article: Neighbourhoods with Increased Property Prices
Another reason rental prices may have suffered a small setback, is the new Urban Leasing Act. The objective of this law is to protect the tenant, who will feel more secure when renting an apartment. A tenant will be safeguarded from future rental price increases by landlords or agencies.
On the subject of apartment owners, the advantages of this new law do not increase, however. Rental prices are restricted by rental contract in compliance with the new law, and this contract should also be clear on the deposit, the duration and possible prolongation of the contract. This means a property owner can only increase the rent after the current tenant has terminated the contract and left the apartment.
According to experts, rental prices cannot keep rising higher than the average income. And yes, many of Barcelona’s apartments are tourist rentals, and this type of accommodation is in high demand, but most apartments in the city are actually long term rental apartments for Barcelona’s residents.
Therefore we come to the conclusion, that if people can hardly afford to pay their rent anymore, there is no other option than for prices to decrease. Of course, the rental market cannot be compared to the sales market, because a future owner can apply for a mortgage, and mortgage payments will match a person’s income level. If people cannot pay their mortgage, the repayment period can be extended.
Are you renting a house or did you buy your home? Do you think prices will drop?