ARAG analyzes in its Radiografía del Inquilino 2023 what the tenant in Spain is like and what their specific needs are, and one of the first conclusions it reaches is that the demand for renting continues to increase. According to the latest INE data for 2021, the percentage of the population living in rented accommodation was around 24% compared to 20% in 2007. Most of this change, which brings us closer to the European average of around 30%, has taken place in the last five years.
The problem? That despite this, the supply of rental housing fell by 17% during the fourth quarter of 2022 compared to the same quarter last year, according to the portal Idealista. In addition, the price of rents has continued to rise, especially in stressed areas, closing 2022 with a year-on-year increase of 8.4%. Potential tenants have not stopped looking, but they are opting for cheaper rents. In the search preferences of people who wish to rent, "affordable housing" is the main one, with 47.5% according to the ARAG study. This data is consistent with the statistics published by Idealista concludes that 15% of rentals were less than 24 hours on the market during October 2022. This behavior is much more accentuated if we focus on the main 'stressed market areas', specifically the cities of Barcelona, Madrid or Palma.
On the other hand, the historic rise in interest rates that began in the middle of last year will make access to mortgages more difficult, so it is likely that the preference for renting will continue or even increase. Likewise, sustained inflation over time, such as the current one, makes it more difficult to achieve or maintain the savings needed to buy a home.
Apart from all this, ARAG points out that the rental housing market in Spain is dominated by small landlords. According to calculations made by the consulting firm CBRE, only between 2% and 4% of the rental housing stock is in the hands of large owners (10 or more leased apartments). This means that most of the players are not professionals, so the risk of friction between the two parties to the contractual relationship is considerably higher.
Therefore, the entity states that the hiring of specialized legal defense services such as our Rental Loss Insurance should be considered.
Source: Insurance News