With vast amounts of Spanish property owners struggling to find buyers, many are looking at joining the 1.5 million second home owners who have been catapulted into the Spanish rental market.
A whopping 55 percent increase in the number of Spanish rental properties over the last two years has been recorded by Idealista, a property research firm based in Madrid. This takes the figure to over 3.3 million, the highest ever recorded by the Ministry of Housing since they started collecting data in 2004. The price of renting a property in Spain has fallen drastically for the first time in 7 years with declines reaching over 8 percent.
Government data shows that in the year before May 2009, property sales in Spain dropped by over a third, and with redundancy at an all time high and property owners facing a yearly tax that is the equivalent of between one and two percent of the property value; even people still with jobs are turning to renting to ease their worry, in the hope that the price of their property will creep back up if they sit on their investment.
Jane Frith, managing Partner at thesaraservice.com said that “owners who need to sell their properties but can not are being forced to rent them out.” Jane also added that the company have never seen this number of properties for rent since they began in the Spanish property market over 6 years ago.
An estimated 29 percent of new homes in the European Union were built in Spain alone from 2001 to 2007, despite the fact that it represents only 9 percent of the European population. Inevitably the construction and real estate boom that has seen us through the last ten years and represented 20 percent of the countries gross domestic product in 2007 has resulted in a glut of unsold apartments, villas and townhouses in the Costa del Sol and throughout Spain.
This housing slump, which has been predicted to see us past 2012, has undoubtedly been one of the main contributing factors to Spain’s worst recession in 60 years, with unemployment rates reaching the highest in the EU (19%).
The good news for clients of thesaraservice.com is that our tenants have a choice of far more luxurious properties for a fraction of the cost.