Spanish rents continue fall
Spanish property rents continued to fall in June, according to new data from the National Statistics Institute. Throughout the month prices for homes to rent declined by 0.1 per cent, making it the third month of contraction. While in the year-to-date revenues increased 0.2 per cent, landlords in the country currently have cause for concern as demand falls.
Rents are continuing to stay below the general consumer price index, which increased by 0.1 per cent in June over May. Year-on-year, the index creeped up by four tenths to 2.1 per cent. The poor drop in rental values coincided with the rollout of the Law on Flexibility Measures and Rental Market Development. Under the legislation, parties can agree from the third year of a rental contract to update rent in isolation from the consumer price index. The cost of housing maintenance is also rising across Spain, increasing 2.1 per cent year-on-year. Compared to December 2012, June maintenance prices were 1.2 per cent higher.
This impacts upon rents for landlords, with the greatest declines noticeable in Navarra. Here values fell by 2.2 per cent, followed by Murcia at 1.5 per cent and La Rioja at 1.2 per cent. The popular tourist destination of Andalucia fared slightly better, only losing 0.4 per cent in value. Interestingly, rents in the Balearic Islands remained stable, increasing by 1.2 per cent in Melilla, 1.1 per cent in Galicia and 0.9 per cent in Ceuta. Catalonia, the Basque Country, Cantabria, Castilla y Leon and Asturias also experienced increases.
However, with property prices at historic lows, savvy investors could increase their rental yields. In areas like the Catalan coast, real estate values have nearly halved since their 2007-2008 peak. Figures from holiday housing market appraiser Tinsa, presented in Barcelona, showed property prices have plummeted by 45 per cent since the financial crisis, Kyero.com reported. This is one of the biggest losses recorded and is 1.8 points lower than the median on the Mediterranean coastline.
Rents are continuing to stay below the general consumer price index, which increased by 0.1 per cent in June over May. Year-on-year, the index creeped up by four tenths to 2.1 per cent. The poor drop in rental values coincided with the rollout of the Law on Flexibility Measures and Rental Market Development. Under the legislation, parties can agree from the third year of a rental contract to update rent in isolation from the consumer price index. The cost of housing maintenance is also rising across Spain, increasing 2.1 per cent year-on-year. Compared to December 2012, June maintenance prices were 1.2 per cent higher.
This impacts upon rents for landlords, with the greatest declines noticeable in Navarra. Here values fell by 2.2 per cent, followed by Murcia at 1.5 per cent and La Rioja at 1.2 per cent. The popular tourist destination of Andalucia fared slightly better, only losing 0.4 per cent in value. Interestingly, rents in the Balearic Islands remained stable, increasing by 1.2 per cent in Melilla, 1.1 per cent in Galicia and 0.9 per cent in Ceuta. Catalonia, the Basque Country, Cantabria, Castilla y Leon and Asturias also experienced increases.
However, with property prices at historic lows, savvy investors could increase their rental yields. In areas like the Catalan coast, real estate values have nearly halved since their 2007-2008 peak. Figures from holiday housing market appraiser Tinsa, presented in Barcelona, showed property prices have plummeted by 45 per cent since the financial crisis, Kyero.com reported. This is one of the biggest losses recorded and is 1.8 points lower than the median on the Mediterranean coastline.
PUBLISHED : 22ND JULY 2013
