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Renting A House Is Becoming Cheaper Than A Year Ago In The Main Cities

ByMike Paul

Oct 29, 2020

The coronavirus epidemic has left a new normal in the rental market A quarter of price falls which became general in large cities at the beginning of summer has made renting a house last September cheaper than a year ago in both Madrid and Barcelona In this the data from the main real estate portals coincide which point towards the same trend in the rest of Spanish cities with more than half a million inhabitants either they already show year-on-year drops or they are getting closer to that scenario.

The latest statistics published by Idealista and Pisoscom as well as the Fotocasa data advanced to EL PAÍS broadly coincide with a hectic summer month after month flats have become cheaper since July in large cities Only the data for Valencia in August and Zaragoza in September with two of the three portals showing growth depart from this norm In all other cases at least two of the sources and often all three coincide on declining rents.

Within the negative spectrum of figures, the percentages range between a null movement Idealista points out that rents were frozen in Zaragoza in August and in Barcelona and Seville in September and the 295 drops that Pisoscom registered in Malaga in September It is a considerable difference when measuring the monthly variation that is how much the price drops in a given month compared to what was paid the previous month In most cases this decline does not reach 2.

But that continuous trickle of slight drops and not so slight is having an effect on the year-on-year variation of prices This measures what it is worth to rent a certain month compared to what was paid in that same month a year before And there the trend of portals converges more and more There is no doubt that Madrid and Barcelona ​​cities that starred in the last rising income cycle and were at historic highs are cheaper than a year ago.

How much has the price dropped in the two big cities Fotocasa considers that last month rents in Madrid were 26 cheaper than in September 2019 difference that Idealista raises to 3 For Pisoscom which is the one that collects the most significant annual drops in all cases homes in the capital were 943 cheaper than 12 months earlier In the case of Barcelona ​​the year-on-year falls range from 4 to 1126 In money this was expressed in a range that goes from 1589 euros per square meter that were paid in Madrid according to Fotocasa to the 1858 euros that it was worth renting in Barcelona ​​according to Pisoscom.

Neither the percentages nor the average income amounts coincide because each portal uses its own statistical method It must also be taken into account that these are based on offer prices higher than the real ones because in the negotiation the tenants can achieve a substantial reduction on what is requested However in the absence of an official statistic that reflects the monthly fluctuations real estate websites are considered a reliable indicator of trends in the rental market.

And what happens in the rest of the municipalities with more than 500000 inhabitants For Idealista rents are still higher than a year ago but by the least, in Valencia Seville and Malaga Zaragoza the cheapest of all in absolute terms resists a little better and is 11 above the levels of September 2019 At the opposite extreme Pisoscom is the one that detects the sharpest annual falls and places all cities with price drops of at least 6 For Fotocasa only in Seville rents were higher in September than 12 months before 07.

At the street level, the sensation points to a market in decline The dynamism that previously existed in renting has now changed says Jaime Cabrero president of the Madrid Association of Real Estate Agents The expert points out as causes the greater slowness to close operations and the increase in the supply of properties that come from the tourism sector which figures up to 20.

For the economist Gonzalo Bernardos the situation is worse than the statistics reflect because many owners do not lower the price on the portal they lower it when negotiating There are people who say they see the market destroyed a company that even at a bad time had 30 homes to rent now has more than 100 adds the director of the Master in Real Estate Consulting Management and Promotion at the University of Barcelona As causes that affect large cities the decline in tourism and seasonal rentals linked to students or travel for professional reasons stands out.

What is clear is that the pandemic has caused an unthinkable situation a few months ago Then as a result of the tensions accumulated over the years specific adjustments could be seen in places like Barcelona But the level of generalization that the drops have reached was not seen in some statistical series since 2013.

The question is how long the rents will continue to get cheaper For Cabrera it is the evolution of the economy itself that is causing these changes and it is possible that certain downward trends will consolidate in the coming months Bernardos sets a date and points out that the falls will continue surely until the first half of 2022 In crises, he explains the group that rents are more precarious and takes longer to recover.

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