When locals can’t afford to live there anymore.
Spain is in the grip of a property boom. Whereas the last bubble was driven largely by the rampant construction and sale of new homes, with the country at one point accounting for more housing starts than Germany, France, Britain and Italy combined, the focal point of the new boom is the smaller but fast-growing rental apartment market.
Spain has traditionally been a country of home-owners, with an average ownership rate of 78.5%, 10 percentage points above the EU average. But things are changing.
“The concept of owning a home in Spain was almost religious, but that’s changed for an entire generation of young people who have seen people losing their homes, (their house) prices dropping, and losing access to credit,” said Fernando Encinar, co-founder and head of research at the online real estate marketplace Idealista. “That has made renting a more attractive option, especially in big cities such as Madrid and Barcelona.”
A recent study by Idealista showed that rents are on the rise across many parts of Spain, though the country is still home to over half a million vacant properties. The cost of renting in Madrid and Barcelona, which between them account for 16% of those vacant properties, has reached historic highs. In Madrid, rents have risen on average by 27% since 2013, and in Barcelona they’ve surged over 50%, with the result that more and more local people are getting priced out of the market…