Shrinking rental stock in Spain is blamed on ‘destructive’ new housing law as landords opt for tourist lets – sparking a tourism backlash on the Canary Islands and elsewhere

RISING rental pressures have been blamed on Spain’s new Housing Law 2023, which has seen landlords choose to take their properties off the market.

This is according to a new report from idealista, who claim that the number of applicants for each apartment advertised on their web portal have increased on average by over half across Spain year-on-year.

Unsurprisingly, the strife-ridden Canary Islands sees some of the highest number of inquiries before an ad is pulled.

A flat rental advert in Santa Cruz de Tenerife sees an average of 44 applicants, a 62% increase on the same period in 2023, while in Las Palmas de Gran Canaria it is 41 – a staggering 118% increase.

The lack of affordable housing has been directly linked to the proliferation of short-term tourist rentals which further ramp prices up, driving a backlash against tourism across the country.

Many landlords are thought to have been spooked out of the rental market by the new regulations passed by Pedro Sanchez’s government in May 2023.

A flat rental advert in Santa Cruz de Tenerife (pictured) sees an average of 44 applicants, a 62% increase on the same period in 2023. CORDON PRESS

Ostensibly designed to help out hard-pressed tenants during a cost-of-living crisis where rent and bill can eat up over 50% of their income, many now see the new rules as backfiring.

The new regulations cap the rates at which they can increase rents and also can potentially lock them into long-term contracts with tenants. 

Residents on the island of Tenerife confirmed to the Olive Press that the rental situation is becoming impossible.

Terrilea Clayton, 22, said she had ‘actually been kicked out of a flat because the landlord wanted to turn it into an Airbnb.’

It is events such as these that have been driving residents on the Spanish holiday island to protest the ‘massification’ of tourism and call for a moratorium on the industry, along with a tourist tax and stricter controls. 

Meanwhile, a wave of new anti-tourism graffiti has popped up near resorts over the past few weeks, with messages reading ‘tourists go home’ and ‘too many guiris’. 

Another Brit on the island, Jay Neil, 43, came to the defence of the region’s tourism industry and turned the spotlight on what he believes to be the real culprits – the landlords.

He said: “They need to stop blaming tourists – it’s the greedy landlords that are the problem. There’s people buying like five apartments and renting them to holidaymakers because they know they can make a fortune. 

“Saying tourists go home is just silly, it’s the government that needs to act to sort out the housing crisis, which is happening all over the world not just here.”

British expat Jay says locals should blame greedy landlords (COPYRIGHT WALTER FINCH)

The Canary Islands are joined by the usual suspects of Madrid, Barcelona and Palma de Mallorca in having a rental crisis.

Curiously, Malaga sees a slightly more moderate 28 applicants per advert – still a 31% increase on last year – and Valencia 29.

Only one city has seen an actual drop in the number of people applying for each apartment (-6%) – Soria, north central Spain.

READ MORE: EXPLAINER: Expat holiday-home owners in Spain beware – the new Housing Law is here

Over the last 12 months – during which the Housing Law has been in effect – the average number of applicants per advert has grown by 55% across the country, according to the report.

Very few cities are below the national average, including Bilbao (26 applicants per ad), Sevilla (25), and Alicante (22).

Among the major markets, Sevilla has registered the largest increase in interested parties per ad, with an 81% increase compared to a year ago. 

It is followed by increases in Palma (71%), Madrid (63%), San Sebastián (58%), Barcelona (39%), Alicante (34%), Málaga (31%), and Valencia (15%).

Idealista spokesperson Francisco Iñareta pointed out ‘the destruction of supply caused by rental policies [that] continues to worsen the chances of accessing housing, especially affecting young people and vulnerable families.’ 

The reality shows that we have the same or more families looking for a home, but fewer and fewer homes offered, which not only increases tensions on prices but also multiplies the difficulties in finding housing and exacerbates the castings that those looking for housing have to face. 

READ MORE: Explainer: What will the government’s planned housing law mean for landlords and tenants?

The competition between potential tenants increases exponentially, which virtually excludes a large part of the interested parties from the market. 

This should be the focus of rental policies, increasing the housing supply and reducing the anxiety of families and prices.”

Vitoria holds the record for interested families per rental, largely due to the very limited rental stock in the Alava capital, reaching 70 interested families. 

It is followed by Guadalajara (59 families), Santa Cruz de Tenerife (44 families), Las Palmas de Gran Canaria (41 families), and Pamplona (41 families). 

On the opposite end are the markets of the cities of Salamanca (with only 7 families interested per ad), Ciudad Real, Ourense, and Badajoz (8 families in each of these cities). 

With nine applicants per dwelling are the cities of Cáceres, Segovia, and Córdoba.

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