The effects of tourism on the Spanish residential market are real. But we should not be responsible for the increase in the rental price of Barcelona or Madrid.
Much has been written about the impact of temporary housing on residential lease. The escalation in the rental price of cities like Barcelona or Madrid. And their appeal as tourist cities seem closely related.
However, a report prepared by Idealista.com seems to dismantle this theory. The portal has detected an average increase in revenues of 15.9% in 2016. It appeals to tourists and residents to follow totally different dynamics.
At the same time it appeals to the local administrations in the search for solutions. This notice comes accompanied by economic arguments and a balance of the change in residential habits.
The solution is to offer more housing and look for less responsible people!
Two markets with two destinations
The rental price in Barcelona and Madrid has been set at highs with a yield of 18.5% and 4.2% above its historical record.
A case in which many point to a single responsible: the tourist rental. However, the industry that has managed to attract 76 million visitors in 2016 shares very little with the traditional rental market.
While temporary housing follows a static model, residential rent is characterized by high turnover.
If we try to locate the large increases in the incomes of Madrid and Barcelona we will see that they are registered in peripheral neighborhoods. Areas unattractive to the tourist and with a lower population density than the visited urban center.
From the same model we also can not see platforms like Airbnb to large hoarders that subtract stock available to the traditional market. In fact, the American giant has just 4,500 homes in Madrid compared to 8,700 Idealista. While in Barcelona it gains by little, with 8,700 compared to 7,000 real estate.
Why not think about construction?
The report points out that the analysis of the increase in rental prices should go beyond existing stock and focus on the low replacement of housing.
The scarcity of new work in the two large Spanish capitals is well known.
Statistics from the Ministry of Public Works point out that between 2014 and 2015, 15,000 new homes were not incorporated between Madrid and Barcelona. A total of 8,891 buildings for Madrid and 5,271 for Barcelona.
While many of the measures taken in both capitals have gone in the line of prohibiting or limiting temporary housing. Instead of favoring the incorporation of a greater number of housing for the residential market.
Economy and rental price
Idealista also points to a fact directly related to economic recovery: employment.
The fact is that housing has a direct impact on the rent of some streets, basically Barcelona (Eixample and Casco Antiguo) and Madrid (center). While the large income rise is moving away from those districts.
In Madrid, the increase in the Tetuán neighborhood (+ 19.3%) and the rise in Sant Andreu (26%) in Barcelona. Areas away from the urban center, and residential. Districts in which the fall of the unemployment of 2014 had an impact in the rise of the incomes that today arrives at the rest of metropolitan zones.
In a few words and quoting Fernando Encinar: “We must consider construction once in areas of high residential demand, such as large capitals.”
