PROPERTY rentals in Spain will be become even more expensive in 2024 with housing supplies at a ‘minimum’ according to the real estate portal Fotocasa.
Rents are projected to rise by over 5% this year, after record-high prices were logged last year.
In the first half of 2023, the all-time high rental price in Spain was recorded at €11.69 per square metre- a figure exceeding the previous record set during the 2007 real estate bubble.
Higher rents are causing- according to Fotocasa- the exclusion from the market of many potential tenants- up to 40%- who can only afford lower prices.
The escalating property costs means that there is a 14% rise in demand for rooms in shared housing due to people unable to pay for a rental home in its entirety.
After a year marked by a slowing in the property market caused by inflation and higher interest rates, Fotocasa says the final figure for 2023 will show over 550,000 transactions.
The portal suggests that sales could fall to over 450,000 this year as consumers resist taking up more expensive mortgages, but it predicts that things will eventually return to ‘normal’.
Falls in the Euribor rate which determines interest and therefore mortgage rates are being recorded but that could take some time to work its way through to customers.
Regarding new-build housing, the rise in prices will continue in 2024 due to factors such as the limited availability of properties.
This is in addition to others such as the tightening of financial lending, the lack of land, the rise of around 25% in construction costs, together with the shortage of labour.
Nevertheless, Fotocasa says the real estate sector will continue to be resilient, adjusting to new norms and will still produce a strong and consistent demand for home purchases.