INCREASED RENTAL COSTS SEEN IN 2016
“This huge increase is still not accompanied by a similar increase in supply, which is actually what drives prices up. It is not in any case a bubble but a notable increase in the interest of Spaniards to rent in certain cities” says Fernando Encinar, head of Idealista.
Also, during the financial crisis, rental prices were more stable because the contracts had been signed years earlier and they are now being renewed and owners can increase the rent, which still remain at quite reasonable levels if we compare them to overseas markets. Rentals do have a ceiling they can reach and there comes a moment when the owner realises that the market cannot sustains huge increases.
Although there has been large increases across the country, there does not seem to be the same pressure as with larger markets where demand is higher. But what the data does show, is that the pressure we see in larger cities, is now moving into surrounding areas, adding to rents that are already quite high.
Catalonia became the most expensive community to rent property in, with an average cost of 13.3 euros per square metre, followed by Madrid (12.9) and The Basque Region (10.4).
At the other end of the scale, are Murcia (5 euros per square metre), Castilla la Mancha (4.5) and Extremadura (4.1).
In Andalucia, the average cost per square metre is 6.4 euros, which is an annual increase of 4.9%.
Some provinces saw a fall in 2016 and the largest of them was Tarragona, where prices fell by 6.3%. The largest were in Barcelona (23.4%), Guipuzcoa (18.1%) and Madrid (18%). Barcelona remains as the most expensive city, where the average per square metre is 15.3 euros, Madrid at 12.9 euros and the Balearic Islands average price is 10.2 euros.
The cheapest monthly rents are to be found in Jaen at only 3.6 euros per square metre, Avila at 3.8 euros/m2 and Lugo at 4 euros/m2.