Spanish rents up for first time in eight years

Photo: Yngvil Osdal Runde

The average rental price of Spanish homes has risen in all regions for the first time in eight years, according to new figures.

Spain's property market has shown increasing signs of gradual, but steady, recovery in recent years, with sales to foreigners rising and mortgage lending increasing. Sales prices, meanwhile, have begun to climb.

The latest figures from the National Statistics Insitute show that prices climbed 4.5 per cent year-on-year in the third quarter of 2015, with values up 0.7 per cent quarter-on-quarter.

Asturias and Extremadura recorded the biggest yearly climbs of 3.5 per cent and 3.3 per cent respectively, while the Basque Country and the Valencian Community saw slight declines. On a quarterly basis, the Balearic Islands led the way with a rise of 1.8 per cent.

Now, though, data from Fotocasa reveals that the growth is spreading to the rental sector as well: the average rental price rose year-on-year in all regions for the first time in eight years in November 2015. Up until that point, the real estate site has recorded annual increases in all areas, except for Castilla-La Mancha and Navarra, both of which began to improve in November.

Catalonia is leading the growth, with prices up 10.6 per cent year-on-year, followed by the Balearics (7.8 per cent), Madrid (6.3 per cent) and La Rioja (6 per cent). Castilla-La Mancha saw rents edge up 0.7 per cent.

"The rent has gained considerable ground in Spain in recent years. After losing 30 per cent of its value during the crisis, [it] now returns to positive rates not seen for eight years," comments Beatriz Toribio, head of studies for fotocasa.es.

Now, rates are stabilising, with areas such as Catalonia and Madrid seeing high drama drive up values. Toribio predicts that rents will remain stable during 2016.

On a annual basis, rents rose by an average of 3.8 per cent, with the typical monthly figure reaching €7.02 per square metre.

On a monthly basis, though, rents are still fluctuating, as the recovery struggles to build momentum. The Balearics led growth, with a rise of 1.9 per cent, followed by Catalonia (1.3 per cent), La Rioja, the Canary Islands and Cantabria (0.6 per cent). Galicia, though, led declines with a dip of 1.2 per cent, followed by the Basque Country (down 0.9 per cent) and Murcia (0.8 per cent).

Since reaching a peak of € 10.12 per square metre in 2007, the average rent has dropped 30.7 per cent in Spain, with five regions seeing prices fall by more than 30 per cent.