The prices of rental housing in the main cities of Europe continue to trend upwards and this is creating complicated conditions for those looking to rent a flat with real estate solutions. Spain is no exception, with special emphasis on Madrid and Barcelona.
The DWS company made a report on the situation in the continent showing that there is an imbalance between the demand and supply of new homes available for rent. This leads to an increase in rental prices of almost 5% every year, since approximately 2016.
Another possible cause of the progressive increase in rents is that, in recent years, inflation has reduced the purchasing power of families and many have chosen to rent and delay a possible purchase. This makes it a very competitive market sector, where large cities present a challenge in terms of rent payments.
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Only the recent situation with the health crisis has put a brake on the rise in rents, but this situation may not continue for long due to the recovery that the market has experienced since 2021.
The situation of Madrid and Barcelona
These two cities are the ones with the highest rents in the entire country, exceeding the national average. For example, in the Recoletos neighborhood of Madrid, a flat of less than 100 m 2 can be rented for more than 1,600 euros. In Barcelona, in the Fort Pienc neighborhood, an apartment of a similar size is rented for more than 1,500 euros.
This occurs because these are densely populated cities and the rental offer has remained unchanged. This scenario is more than favorable for prices to be high, even more so in the most central neighborhoods.
Compared to other cities in Europe, these prices may seem low. Since the most expensive areas of London and Zurich are located at 3,000 euros per month. At the lower end, according to DWS, are Warsaw and Budapest where the areas with the highest rents are below 1,000 euros per month.
What could be the solutions?
One of the possible solutions is to strengthen collaboration between private companies and the public administration so that more real estate developments with affordable housing are created in large capitals, understanding that they are centers that attract trade and foreign investment.
The increase in supply would help balance market prices, without the need to resort to regulatory measures that can create uncertainty for property owners who want to rent their properties.
The States play a fundamental role in improving the amount of rental housing, their economic support, as well as in the simplification of the requirements and regulatory framework could make a difference.