Home Investment

News and Articls

No bubble: rental prices are falling in Barcelona and stable in Madrid

Idealista data showed that fear of a new housing bubble is unfounded / Gtres

In 2018, the rate of rental price growth smoothed and ended the year in Spain, with an increase of 9.3 per cent, leaving by month the average rental per square meter at EUR 10.60 (98 cents per square foot). This growth rate is low compared to the 18% it grew in 2017. The rate of growth slowed in the final quarter of the last year, as prices fell by 0.6 percent.  real estate agent

Madrid ended 2018 with a year-over-year increase in the rented housing price of 4.3 percent, which puts the average price per square meter in capital at 16.20 Euro (1.50 Euro per sq ft per month), while prices decreased 1.5 percent over the last three months of the year.

For the second consecutive year, Barcelona saw rental prices fall. It decreased by 1% to 17,30 euro/m2 in 2018 (1,60 euro/sq ft) after a further decrease of 2,4% in 2017. Still, it's Spain's highest rent in a provincial capital. Prices remained stable in the last quarter of the year in the quarterly calculation.

For idealist research manager Fernando Encinar, "the figures prove what we have been saying at idealist for centuries: there are no rental bubbles. And if it exists, the data show that it is deflated. Prices went up in 2018 throughout Spain, but this growth is far from previous years. In addition, the major leasing markets, mainly Barcelona and Madrid, anticipate a trend in other cities: for the second consecutive year, in Barcelona rental prices fell and in Madrid stabilized with a slight annual increase of 4 percent, although falling prices had also been reported in the past few months of 2018.

"Faced with a normalization scenario and price adjustments, we consider it highly risky to legislate now on a situation that no longer exists and that could very seriously damage the growth of the market. There is no statistical information currently justifying the urgency of regulating price control which is in fact already being adjusted in the large markets. In the coming months we will see how prices of rent stabilize or go into a plateau phase. There may still be price tensions in some neighbourhoods, but they are based on high demand, which collides with a supply shortage on these streets. But we generally expect prices to be moderated. Only housing policies that strangle supply and dramatically reduce this stability trend could break."

Self-government Communities

All 17 Autonomous Communities in Spain have recorded prices above that of one year ago, with the exception of Extremadura (-0.1 percent ). La Rioja, where owners requested 10.5% more to rent their dwellings than a year ago, was the largest increase. Following this were increases in Navarre (9.5%) and Cantabria (8.8 percent ). On the other hand, Catalonia enjoyed the lowest increase (1.3%), followed by the Balearic Islands (2.9%), Murcia (4.1%) and Castile and León (4.9 percent ).

Madrid is the most expensive Spanish Autonomous Community (with 15,10 euro/m2 or 1,40 euro/sq ft). The Balearic Islands (12,90 euro/sq m2 or 1,20 euro/sq ft) and the Basque Country (11,80 euro/m2 or 1,10 euro/sq ft) followed by Catalonia (14,60 euro/m2 or 1,36 euro/sq ft). On the opposite end of the table are the cheapest communities: Extremadura (€ 4.10 / m2 or EUR 0.38 / sq ft), Castile-La Mancha (€ 5.10 / m2 or EUR 0.47 / sq ft) and La Rioja (€ 6.5 / m2 or EUR 5.53 / sq ft).

Provinces of Spain

In 2018, only 4 of Spain's 50 provinces saw their prices fall. The biggest decline was in Tarragona, where prices fell by 2.7%, followed by falls in Badajoz (-2.2%), Ciudad Real (-0.9%) and Barcelona (-0.2 percent ). On the other hand, the largest increase occurred in Santa Cruz de Tenerife (14.5%), Burgos (13.7%) and Toledo (13.7 percent ).

The most expensiven provinces had the lead in Barcelona (15,80 euro/m2 or 1,47 euro/sq ft per month). The Balearic Islands (12,90 euro/m2 or 1,20 euro/sq ft) and Gipuzkoa were ranked in Madrid (15,10 euro/m2 or 1,40 euro/sq ft). Jaén (3,90 euros per sq ft) and Cáceres (4 euros per sq ft), respectively, are the cheapest provinces and Ávila and Badajoz (4,20 euros per sq m or 0,39 euros per sq ft) are also the cheapest ones.

Capital of the provinces

Barcelona is one of the five capitals that have seen a price decline in the last 12 months (-1 percent ). Other countries include Castellón (-6.8%), Tarragona (-5.3%), Jaén (-3.1%) and Ciudad Real (-0.1 percent ).

In all other capitals, today's rental prices are higher than 12 months ago. Burgos is the capital where rent prices grew most in 2018. A 12.7 percent increase in the cost of renting a home has placed its price at €7.10 per m2, i.e. €0.66 per m2 per month. Guadalajara has also grown substantially, with a 10.4 percent increase, followed by A Coruña (9.6 percent) and Lugo (9.5 percent ). In Madrid this year, the increase has relaxed and remained cool at 4.3 percent.

Barcelone has consolidated its position as the most costly Spanish capital (€17.30/m2 or EUR 1.60./m2) in spite of its decline, followed by Madrid (Euro 16.20/m2 or EUR 1.50/sq ft) and San Sebastian (Euro 15.30/m2 or EUR 1.42/sq ft). The top of the table are Cáceres (€4.70/m2 or Euro 0.44/sq ft), Jaén (€4.80/m2 or Euro 0.45/sq Ft) and Zamora (€4.90/m2 or Euro 0.45/sq ft), the cheapest capitals in the world.

The idealistic price index

Idealista is currently Spain's most used property marketplace for purchase, sale and lease. With thousands of properties currently on sale, the idealista research department has been analyzing immobilization prices since 2000. With 18 years of research, idealista has become the standard source of data for numerous analytical teams, from the banking and financial institutions to public institutions.

To assemble this property price index, idealista analyzed 63,545 property listings that were announced in December 2018 on their database. To ensure correct data, properties previously priced outside the market were not counted in the analysis and single-family homes, as the results in certain areas were skewed. For municipalities with less than 50 properties, the price is not available because the sample size is not sufficient. The price index of the idealista property is compiled with the price offered per built square metre.

Go Back


Blog Search


There are currently no blog comments.