When it comes to the housing market in Spain, there seems to be no end to
the problems. The rental prices for residential properties have spiked in
all the major cities and the worst hit are the cities of Barcelona and
Madrid and Balearic Islands, the hubs of Spanish residential sectors.
Spain’s Balearic Islands penalise landlords for illegally renting
apartments to tourists with fines of up to 40,000 euros ($47,228) amid a
backlash against the effects of mass tourism across the country.
Rent in the Catalan
capital rose by €17.4/sqm/month on an average i.e. almost by 18.5%
compared to the rents a year ago. Rental prices also rose sharply in
Madrid by 14.6% in the third quarter of 2015 to €13.8/sqm/month
(according to Idealista’s latest report).
In a recent article published in the Spanish daily El
Periodico, Carloz Marquez presented an analysis of the rental market in
Barcelona. Marquez’s data showed that 20% of the accommodation listed is
rented within 24 hours, 44% in a week and 78% in a month.
Major Problems Existing
in the Rental Property Market
Illegal Subletting
Most apartment owners in Barcelona often complain about the
major issue of illegal subletting. It has often been observed that people
pose as long-term tenants while renting properties. Later, these
properties are illegally sublet to tourists for a short time-span through
vacation accommodation sites such as Airbnb. This way the original
tenants earn almost triple the cost of the actual rent.
Airbnb has specified that anybody who lets out a property
needs to have an individual profile. Moreover, any person who uses Airbnb
to rent out properties must also register themselves with local
authorities. Despite these strict regulations, still people have more
than one profile registered on the Airbnb site.
The unfortunate part is that the homeowners are fined and not
the tenants rent out rooms and who actually breach the rules. This is
indeed a nightmarish scenario for landlords that make them more
apprehensive when they rent out their properties.
In the Balearic Islands, which
drew more foreign visitors than any other region in Spain, rental costs
have jumped and there are fears of a housing shortage for residents.
Rental prices in Palma de Mallorca, the Mediterranean archipelago’s
biggest city, have risen 40 percent in the last five years, according to
property platform Mitula. The island of Ibiza has the biggest density of
Airbnb rentals, with a tourist apartment for every 30 residents, data
from analytics firm Airdna showed.
Renting out apartments without a licence was banned in the Balear
Islands in 2012 under a previous administration but enforcement was
largely nonexistent, according to the Balearic government. The new
legislation establishes fines of between 20,000 and 40,000 euros for
those offering short rentals without a license to tourists. Local residents
will be able to report suspected illegal flats through a website, and
online platforms such as Airbnb and HomeAway could also face fines if
they are found to advertise rentals without a license number.
Online Rental Scams
Online rental scams have become a pressing issue in the
present day rental market in Spain. Criminals often dupe people by
showing them images of properties that are simply copied from other
websites. Such properties could be non-existent or may have already been
rented out.
Properties for rent are advertised on free online platforms
such as Gumtree, which only asks renters to verify their phone numbers
and email addresses. Once prospective tenants show interest in a listed
property, they are instructed to pay a token amount to make a booking.
The moment the transaction is completed, the fraudster in the
garb of the landlord deactivates their email address.
High Deposits
According to the Spanish rental law, the minimum deposit that
you are required to pay is a month's rent for apartments without any
furniture and two months deposit for accommodations that are fully
furnished. Many landlords may also ask for six months' payment as a
guarantee.
However, you can always try to negotiate and try to pay for
just two or three months. As per Spain’s new rental law, landlords can
now evict tenants who don’t pay their rent after six weeks instead of six
long months that was the norm earlier.
Those who are compelled to
look for a rented accommodation in Spain come to terms with the enormous
demand as they witness properties getting rented in a matter of hours.
Airbnb said the new rules were complex and confusing as they did not
distinguish between local families sharing their homes and professional
operators running a business. It said it was ready to collaborate with
the local authorities on establishing clearer regulation.
“By working together, we can help build sustainable tourism models that
spread benefits to many - not keep them in the hands of a few,” the firm
said in an emailed statement.
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