Number of permanent rentals down by 33% and seasonal rentals up fivefold in last five years in Malaga

In the past 12 months, however, the number of properties offered for long-term rental in the Costa del Sol capital has recovered somewhat

Cristina Vallejo

Malaga

Friday, 11 October 2024, 11:38

Finding a place to rent in Spain is becoming more and more difficult. On the one hand, the price makes it difficult. On the other hand - and it is also one of the causes of the rise in rents - is the dwindling supply.

The latest report by Idealista (the output of data from this real estate portal is prolific with studies published most days) puts figures on the reduction of ads for flats for rent. In Malaga the supply of rental housing has fallen by a third in the last five years. In Spain as a whole the fall has been the same - 33%. This is the average fall. In some provincial capitals the fall has been much greater. For example, in Barcelona the available supply has been reduced by 75%. In Oviedo, San Sebastian, Las Palmas de Gran Canaria, Madrid and Palma de Mallorca it has been reduced by around half.

In contrast, what has seen an increase has been the supply of seasonal, short-term rentals. In Malaga it has increased by 466%, so it has increased more than fivefold since the third quarter of 2019. That is a significant increase compared to the 232% rise in this segment of the market in Spain as a whole. As a result the supply of short-term rental properties now represents 11% of the total rental market in Malaga, which is, however, lower than in Spain as a whole (14%).

The Spanish average is higher, for example, in Barcelona, where the short-stay rental supply is equivalent to practically half (46%) of the homes available for rent, according to data from Idealista. Similarly in San Sebastian, seasonal renting accounts for 38% of the total market. Then Badajoz with 30%. In Andalucía, Malaga province is surpassed by Cadiz. In Cadiz city itself one out of every five residential properties for rent is for short stays.

Moreover, it has been in another Andalusian capital, Jaen, where the supply of seasonal rentals has grown the most, shooting up by 2,500% in the last five years. In Granada and Cordoba the increase has been around 1,000% - it has multiplied tenfold. However, in these provincial capitals the proportion of short-term renting does not even reach 10%, so the significance of the increases in short-term renting for those cities is less than in the Costa del Sol capital.

Are the changes in the last year just an illusion?

In the last year, however, the market has been a little different. In Malaga the supply of permanent or long-term rentals has grown by 23% (while in Spain as a whole it has fallen by 5%) alongside a 7% drop in the number of properties available for seasonal rental (while across the country the increase has been 39%).

Nevertheless, according to Francisco Iñareta, spokesman for Idealista, "despite the illusion that the return to the market of some homes [for long-term renting] after the change approved in March 2019 may have meant in certain places, the available supply continues to fall." He continues: "This has put enormous pressure on prices, it has increased competition between families to buy a home and, as a result, has practically driven the youngest and most vulnerable out of the market."

Looking at another report from Guest Ready, a short- and medium-term rental management company, it highlights the advantages and disadvantages of seasonal rentals. Among the first of these, "flexibility for tenants and owners", because it allows the former to move in quickly and the latter to obtain a higher income than traditional rentals. This implies a "balanced profitability" for landlords: "Medium-term rentals are somewhere between holiday rentals - which imply higher daily income but also higher turnover - and long-term rentals in terms of profitability." They also point out that it is an "ideal solution for digital nomads and temporary workers." In terms of disadvantages, they list: the risk of vacancies occurring, which affects the final profitability and ROI (return on investment) for the owner, along with operating and maintenance costs, which are higher than those of long-term rentals, plus a higher cost for tenants compared to long-term rentals.

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