Bank of Spain issues rental housing warning for Malaga and Marbella

In a report published weeks ago and presented this Monday to Congress by its governor, José Luis Escrivá, the Bank of Spain has warned that the current availability of housing not strictly for residential use - and dedicated to holiday rentals - in Spain as a whole is equivalent to 39% of all households. However, this financial institution also pointed out that housing availability varies greatly by province. According to the document, if all second homes, tourist homes and those owned by non-residents were brought to market, the residential market would expand by 40% in Malaga province, by 50% in the Balearic and Canary Islands and by 35% in Alicante.

Ángel Gavilán, general director for the economy with the Bank of Spain, also spoke about the data this week, giving detailed figures by municipality. He drew attention to the situation in Marbella, a Costa del Sol town in which the proportion of housing used for tourist rentals was above 60% in 2023. That is not the highest weighting, as there are some places in Elche (Alicante province) where holiday rentals represent close to 70% of the market. As for the provincial capitals, Malaga stands out once again, with the city's outlying districts having half of the rental housing dedicated to tourist use.

Another snippet of information provided by the Bank of Spain in its annual analysis of the Malaga property market: in the Spanish housing stock as a whole, the proportion owned by non-resident foreigners exceeds half a million, accounting for 2% of the total. However, this figure reaches ratios of around 11% in Alicante province and 8.5% in Malaga province.

The Bank of Spain's latest annual report also highlights the imbalance that exists in the Spanish real estate market, in particular the "shortage of new homes", which it measures by comparing the number of recently completed houses with residential demand, using net household creation as a reference. According to its calculations, the cumulative gap between these two figures from 2022 to 2024 ranges somewhere between 400,000 and 450,000 homes, therefore rendering the housing shortfall close to half a million. Furthermore, this imbalance is "particularly significant" in five provinces: Madrid, Barcelona, Valencia, Alicante and Malaga. These five locations account for half of the entire country's housing shortage, according to this central bank's figures. This means that, in these five provinces alone, there is a shortage of more than 200,000 homes.

The Bank of Spain's analysis is that, in these five areas, in order to meet the demand for new homes being created, second homes and vacant homes are being converted into residential use. The report flags up another phenomenon: the conversion of commercial real estate to residential use. In fact, it is very common on the streets of Malaga city to see change of use from commercial to residential in many premises. According to data collected and published by SUR, Malaga city council authorises two residential units per day in business property or in commercial spaces within buildings across the city.

The report also mentions the shortage of residential housing seen in the Basque provinces and Las Palmas, which contrasts with the excess in relation to the number of households seen in the provinces of inland Spain.

The housing shortage in Spain as a whole has worsened because, according to provisional data, the increase in the number of households in 2024 was 180,000. While this figure is lower than the levels recorded in 2022 and 2023, it exceeds the annual average for the period from 2013 to 2021, when the average increase was 80,000.

The shortage of new homes highlighted by the Bank of Spain in this report explains why the real price increase for new homes has been 62.1% over the last decade, compared to the 36.4% price rise for existing homes.