Housing sector strong against government rent index

The government presented the rental price reference index this Tuesday and with it the controversy was resolved. The industry has mostly opposed it since the measure was announced following the approval of the Housing Code nine months ago. The index is presented as a rental price control mechanism aimed at reducing exorbitant rental prices in Spain. It provides a set of indicative values ​​as a reference for determining new lease agreements. Industry professionals warn this will be counterproductive.

real estate portal apartments.com He was one of the first to emphasize his stance against it, “questioning the effectiveness of this measure.” Your Research Director, Ferran Font, stated that “this will be a brake on the introduction into the rental market of new properties that have not been there and have not been rented for more than five years, because they will have to go at those reference prices.” Consider that there is a lot of difference between current prices and reference prices. Therefore, incentives for property owners to put their properties on the rental market are “very limited.”

For your part, Association of Promoters and Builders of Spain (APCEpaña) assures that the Government’s efforts on housing are “poorly directed”. General secretary of the association, Beatriz Toribio, states that it is the lack of rental housing that puts pressure on prices and that, given this phenomenon, “the difference between the offer price and the final price could not be that different.” Users “should be aware that this is not a true picture of the market,” he insists, and predicts “discord” between landlords and tenants. To support his thesis, he advocates the creation of his own Housing Observatory, together with the CEOE, which could “focus on supply, not prices”. He concludes that limiting prices merely creates a brake on supply.

The real estate portal is also positioned in the same direction. photo house, understands that it is the lack of supply that drives prices up. And it warns that this “is an intrusive measure for landlords, which could also be reflected in a contraction in the supply of rental housing”. He argues that property owners are looking for the maximum possible profitability, and if it is limited, this is a disincentive for them to launch or offer new properties to the rental market “at a time when we have minimal rental housing stock”.

Manager of consulting firm ZMA Real Estate Management, Iñaki UnsainHe argues that since the supply will decrease, those who will have the most difficulty in accessing housing will be families with low purchasing power. “We are facing a big mistake” […] “Intervention in the housing market will not only reduce prices, but also cause people to shift their investments to other regions and change the types of contracts,” he predicts.

Related news

professors José Garcia Montalvo And Josep Maria RayaResearch consultant at Pompeu Fabra University and the Federal Reserve Bank of San Francisco, Joan Monras, recently published a report in which they also questioned the measure. “The problem of high rental prices in major cities is, of course, a problem of lack of supply, given the increase in demand, rather than market power,” they say.

The index will be applied to the areas considered. stressfulThese are situations where the average cost of rent represents more than 30% of the average household income and prices have increased by more than 3% of the CPI. The indicator will affect large owners (those with more than five or ten homes, depending on the Autonomous Community) or homes that have been off the rental market as a primary residence for the last five years. It will be the Autonomous Communities themselves who demand the declaration of problematic areas. Currently only Catalonia has requested this and it will be implemented on March 13.