A SHARP rise in the number of fixed-rate mortgages in Spain has been reported in the past two years – and they now account for 43% of every new loan taken out.
Seeking a quiet life: Rent falls in big cities and home sales outside them soar
07/07/2021
RENTING a property in most of Spain's largest cities has become cheaper, largely due to the 'urban exodus' following the pandemic and the switch to working from home, according to market sources.
The monthly cost to tenants in Madrid and Barcelona has long been a bone of contention with government coalition partners Unidas Podemos, and the general consensus among its members – and tenants themselves, especially young adults first leaving home – has been that rent prices needed to come down.
But a reduction in rent across the board means demand is likely to rise and young tenants are less likely to have to move back in with their families when money is tight, meaning greater chances of stability for landlords who prefer a steady income, or who need ongoing renters to cover a mortgage on the property.
With office employees now tending to work from home more – a trend that began in lockdown – location is becoming less of an issue, and the onset of the Covid crisis led to reports of professionals shifting to the countryside and coast, at last able to live where they wanted to rather than where they had to as the length of commute ceased to be a crucial factor.
As a result, lower demand in Madrid has brought rent prices in the city down by 10%, and in Barcelona by 9.9%, not including those parts of Catalunya's key urban areas where authorities have capped rent to prevent speculation forcing lower and middle earners out of the market.
Given that the rent limits have not been applied region-wide, towns which do not have a cap have seen a slight rise in prices.
Rent in Valencia city has fallen by 9.5%, although the drop is less pronounced in the cities of Sevilla (8.8%) and Málaga (6.6%).
The only one of Spain's biggest metropolitan zones where rent has not dropped is Zaragoza, in central Aragón, where it has actually risen – by 1.5%.
Even with the market-led reduction, the largest cities remain expensive for tenants – Barcelona being the most pricey in the country, with an average of €14.30 a month per square metre, meaning even just a very small, one-bedroom flat costs €572 a month to rent, and this is the cheapest it has been since 2017.
Madrid is at its lowest in four years, at €13.40 per square metre, or €536 for a very small one-bedroom flat.
Sevilla remains slightly more expensive than Valencia - €8.80 per square metre, as opposed to €8 – both of which are the lowest since 2018.
Nationwide, the fall in rent prices in Madrid and Barcelona has skewed the figures, giving a reduction across the board of 3.5%, although this is less likely to be the case outside major metropolitan zones.
Monthly rent and property size: Average by region
Average rent prices by region and property size shows that a typical property in the Comunidad Valenciana is 112 square metres and costs tenants €841 a month, although the cities and most sought-after commuter and holiday hotspots skew the figures, as properties of at least this size can be rented for well under half that in smaller towns, even near a beach.
The average rental property size in the Balearic Islands is 131 square metres, costing €1,292 a month to rent, whilst in Catalunya, it is 106 square metres and costs €1,342 a month.
Among the smallest rental properties are Galicia (99 square metres), Castilla y León (96 square metres), Cantabria (93 square metres), the Basque Country (87 square metres), Aragón (85 square metres), and Asturias (80 square metres), with prices based on these property sizes being €606 in Galicia, €613 in Asturias, €648 in Castilla y León, €736 in Cantabria, €628 in Aragón, and €1,092 in the Basque Country.
Tenants get the most for their money in the Murcia Region, with 102 square metres for €609 a month; Castilla-La Mancha, at 114 square metres for €558 a month; and Extremadura, at €445 a month for 101 square metres, which works out one of the cheapest regions to rent.
Although the variations between towns are vast, with cities costing more, countryside or inland areas being the least expensive, and coastal zones covering the full scale depending upon whether they are major holiday hotspots or lesser-known, local beaches, a typical figure given for Andalucía in the south is €889 a month for 108 square metres.
The Canary Islands comes out at €761 a month for 80 square metres.
Overall, the current national average size of rental property is 104 square metres, at a cost of €960 a month.
Home sales soar as city-dwellers seek quieter life
Estate agency figures showed 70% more tenants in the first three months of 2020, but this number fell as a result of lockdown – the 'urban exodus' means those who opted to settle outside cities automatically tended to find themselves in cheaper housing areas, especially where these were in the countryside.
As a result, buying suddenly became more viable than renting, and seems to have been a major factor behind the sharp spike in the number of second-hand homes changing hands: Sales soared by 57% in the first quarter of 2021, based upon the same period in 2020, according to figures released this week.
This demand increase has led to a year-on-year home price rise of 4%, with a national average of €2,292 per square metre – although huge regional variations mean some parts of Spain have large detached houses with pools on sale for a tenth of the price of a small flat in others.
Home values remain around 34.3% lower than their peak in 2006 and 2007, when these became almost unsustainably high and eventually led to a glut in properties for sale and a dramatic drop in demand, particularly as the Euribor, or Eurozone interest rate, was hovering above 5%, compared to the past five years when it has been below zero.
In terms of very large towns and major cities, home-buying prices, not including new builds, rose annually by 1% in Valencia, 1.6% in Zaragoza and 1.8% in Sevilla, but fell by 6.3% in Alcalá de Henares and 4.4% in Alcorcón (both in Madrid).
The most expensive homes to buy in Spain continue to be in Barcelona city, at €3,033 per square metre, followed by Madrid city at €2,627, L'Hospitalet de Llobregat – just outside Barcelona – at €2,293, all of which practically double the cost of buying a property in the cities of Sevilla and Valencia, which are currently €1,351 and €1,299 per square metre respectively.
“Changing housing market”
According to head of the faculty of economics at Barcelona's Pompeu Fabra University, Dr José García-Montalvo, the move-out from major cities is likely to be a feature of the home sales and renting market for some time.
Buyers and potential tenants are seeking more indoor and outdoor space, more natural light, and at least a balcony or terrace if not actually a garden and their own pool – elements that suddenly became conspicuous by their absence during last year's lockdown when adults who had none of these only experienced life outdoors when they went to the supermarket, and children were literally confined between four walls with no fresh air.
Back then, even communal gardens and pools were off-limits, making private gardens and terraces a godsend.
“It seems there's less activity in major cities than in other areas, and that indicates the geography of the housing market is changing, in terms of buying and of renting,” says Dr García-Montalvo.
“During the pandemic, in Spain, we've seen a certain tendency towards demand for homes with more square metres, more outside space and not so concentrated in the biggest metropolitan zones.”
Related Topics
RENTING a property in most of Spain's largest cities has become cheaper, largely due to the 'urban exodus' following the pandemic and the switch to working from home, according to market sources.
The monthly cost to tenants in Madrid and Barcelona has long been a bone of contention with government coalition partners Unidas Podemos, and the general consensus among its members – and tenants themselves, especially young adults first leaving home – has been that rent prices needed to come down.
But a reduction in rent across the board means demand is likely to rise and young tenants are less likely to have to move back in with their families when money is tight, meaning greater chances of stability for landlords who prefer a steady income, or who need ongoing renters to cover a mortgage on the property.
With office employees now tending to work from home more – a trend that began in lockdown – location is becoming less of an issue, and the onset of the Covid crisis led to reports of professionals shifting to the countryside and coast, at last able to live where they wanted to rather than where they had to as the length of commute ceased to be a crucial factor.
As a result, lower demand in Madrid has brought rent prices in the city down by 10%, and in Barcelona by 9.9%, not including those parts of Catalunya's key urban areas where authorities have capped rent to prevent speculation forcing lower and middle earners out of the market.
Given that the rent limits have not been applied region-wide, towns which do not have a cap have seen a slight rise in prices.
Rent in Valencia city has fallen by 9.5%, although the drop is less pronounced in the cities of Sevilla (8.8%) and Málaga (6.6%).
The only one of Spain's biggest metropolitan zones where rent has not dropped is Zaragoza, in central Aragón, where it has actually risen – by 1.5%.
Even with the market-led reduction, the largest cities remain expensive for tenants – Barcelona being the most pricey in the country, with an average of €14.30 a month per square metre, meaning even just a very small, one-bedroom flat costs €572 a month to rent, and this is the cheapest it has been since 2017.
Madrid is at its lowest in four years, at €13.40 per square metre, or €536 for a very small one-bedroom flat.
Sevilla remains slightly more expensive than Valencia - €8.80 per square metre, as opposed to €8 – both of which are the lowest since 2018.
Nationwide, the fall in rent prices in Madrid and Barcelona has skewed the figures, giving a reduction across the board of 3.5%, although this is less likely to be the case outside major metropolitan zones.
Monthly rent and property size: Average by region
Average rent prices by region and property size shows that a typical property in the Comunidad Valenciana is 112 square metres and costs tenants €841 a month, although the cities and most sought-after commuter and holiday hotspots skew the figures, as properties of at least this size can be rented for well under half that in smaller towns, even near a beach.
The average rental property size in the Balearic Islands is 131 square metres, costing €1,292 a month to rent, whilst in Catalunya, it is 106 square metres and costs €1,342 a month.
Among the smallest rental properties are Galicia (99 square metres), Castilla y León (96 square metres), Cantabria (93 square metres), the Basque Country (87 square metres), Aragón (85 square metres), and Asturias (80 square metres), with prices based on these property sizes being €606 in Galicia, €613 in Asturias, €648 in Castilla y León, €736 in Cantabria, €628 in Aragón, and €1,092 in the Basque Country.
Tenants get the most for their money in the Murcia Region, with 102 square metres for €609 a month; Castilla-La Mancha, at 114 square metres for €558 a month; and Extremadura, at €445 a month for 101 square metres, which works out one of the cheapest regions to rent.
Although the variations between towns are vast, with cities costing more, countryside or inland areas being the least expensive, and coastal zones covering the full scale depending upon whether they are major holiday hotspots or lesser-known, local beaches, a typical figure given for Andalucía in the south is €889 a month for 108 square metres.
The Canary Islands comes out at €761 a month for 80 square metres.
Overall, the current national average size of rental property is 104 square metres, at a cost of €960 a month.
Home sales soar as city-dwellers seek quieter life
Estate agency figures showed 70% more tenants in the first three months of 2020, but this number fell as a result of lockdown – the 'urban exodus' means those who opted to settle outside cities automatically tended to find themselves in cheaper housing areas, especially where these were in the countryside.
As a result, buying suddenly became more viable than renting, and seems to have been a major factor behind the sharp spike in the number of second-hand homes changing hands: Sales soared by 57% in the first quarter of 2021, based upon the same period in 2020, according to figures released this week.
This demand increase has led to a year-on-year home price rise of 4%, with a national average of €2,292 per square metre – although huge regional variations mean some parts of Spain have large detached houses with pools on sale for a tenth of the price of a small flat in others.
Home values remain around 34.3% lower than their peak in 2006 and 2007, when these became almost unsustainably high and eventually led to a glut in properties for sale and a dramatic drop in demand, particularly as the Euribor, or Eurozone interest rate, was hovering above 5%, compared to the past five years when it has been below zero.
In terms of very large towns and major cities, home-buying prices, not including new builds, rose annually by 1% in Valencia, 1.6% in Zaragoza and 1.8% in Sevilla, but fell by 6.3% in Alcalá de Henares and 4.4% in Alcorcón (both in Madrid).
The most expensive homes to buy in Spain continue to be in Barcelona city, at €3,033 per square metre, followed by Madrid city at €2,627, L'Hospitalet de Llobregat – just outside Barcelona – at €2,293, all of which practically double the cost of buying a property in the cities of Sevilla and Valencia, which are currently €1,351 and €1,299 per square metre respectively.
“Changing housing market”
According to head of the faculty of economics at Barcelona's Pompeu Fabra University, Dr José García-Montalvo, the move-out from major cities is likely to be a feature of the home sales and renting market for some time.
Buyers and potential tenants are seeking more indoor and outdoor space, more natural light, and at least a balcony or terrace if not actually a garden and their own pool – elements that suddenly became conspicuous by their absence during last year's lockdown when adults who had none of these only experienced life outdoors when they went to the supermarket, and children were literally confined between four walls with no fresh air.
Back then, even communal gardens and pools were off-limits, making private gardens and terraces a godsend.
“It seems there's less activity in major cities than in other areas, and that indicates the geography of the housing market is changing, in terms of buying and of renting,” says Dr García-Montalvo.
“During the pandemic, in Spain, we've seen a certain tendency towards demand for homes with more square metres, more outside space and not so concentrated in the biggest metropolitan zones.”
Related Topics
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