Curbing speculation: will fewer large holders improve the housing situation?

BarcelonaThe legal backing of a group of experts to the prohibition of speculative housing purchases unblocked last week the agreement on the 2026 budgets between the Government and Comuns. The objective of the measure is to make housing more accessible by intervening in demand, with the premise that if purchases by companies and large holders are limited, there will be less competition. The formula to apply it is a reform of the urban planning law which would leave the decision to limit the uses to which a buyer or someone who has just inherited an apartment can put it in the hands of the town councils. Now, PSC and Comuns will have to seek parliamentary alliances to move it forward. But, beyond the legal doubts about the law, the debate emerges as to whether it will succeed in influencing the market in favor of small owners or, directly, of those who are not yet owners.

If the market has fewer large competitors, will this lower the price of apartments?

The experts consulted by ARA disagree on the impact that expelling companies and large holders from the market could have on apartment prices – they will only be able to buy entire buildings to rent them out and, in the case of individuals, second homes. "The impact on prices will be small or negligible, and I don't think it will be much different depending on whether these measures are approved or not. The moderation in prices will come more from the exhaustion of inertia than from the purchasing power of buyers," explains Josep Reyner, president of the Catalan economics commission of the College of Economists.

A little more optimistic is the director of the Chair of Decent and Sustainable Housing at UPF-BSM, Ramon Bastida, who sees an opening for new players to enter the market. The expert believes that the veto on purchases by large owners or companies could help contribute to prices "not rising," but agrees in not expecting the situation to be turned upside down, neither in purchases nor in rentals. "It could have an impact, but it could be more of a media impact than a real one," reasons the also professor in the department of economics and business at UPF. In fact, Catalan notaries denied with figures this week that speculative purchases are a relevant phenomenon in the volume of housing sales and purchases.

Fewer large holders means less renovation?

One of the other great unknowns is how the measure would affect renovation operations in a stock where, according to 2023 data, one in three homes is empty. Companies and large holders are, by their nature, those with the most economic muscle to undertake major overhauls of properties that, as they are, cannot be put on the market. According to the experts consulted, a collateral effect of the law could be a slowdown in renovations, if the veto is not accompanied by aid to other profiles so that they can also bear the expense. Faced with this, Comuns demanded that the Government get involved with public renovation policies so that they do not depend on "vulture funds."

The urban planner architect Manuel Larrosa warns about the effects that limits on the return that can be obtained from property sales and purchases may have on construction. "We may find that vulture funds are the most interested in building. The profitability they ensure is high, but we are generating a protected market with protectionism," he points out. In any case, he sees "the exercise" of this veto as "very complicated." "The ideal is to put supply on the market that has a public component, but that it is not built solely by the public sector," he adds.

What happens if each municipality chooses what to do?

However, even if it goes ahead, the agreed reform will not mean the automatic prohibition of any purchase for anyone. Each town council will be able to decide whether to introduce this veto in tense areas and, therefore, the final impulse will be subject to the will of each council. This can generate asynchronous situations between neighboring territories, which adds another "complex and legally difficult" component to the regulation, points out Bastida. What Barcelona does will also be key, which is experiencing the biggest loss of rental apartments and has already seen a year of price increases, despite the caps of the housing law. For Reyner, if limiting speculative purchases can be useful somewhere, it is in the Catalan capital, with areas where the concentration of housing ownership is high, such as Ciutat Vella or Gràcia.

Is it enough?

The diagnosis of the three experts is unanimous: limiting the accumulation of housing in a few hands is not enough to improve access to housing, which stems from a "structural" problem of supply scarcity, aggravated by the time it takes to bring a property to market from planning to key handover. Larrosa, for example, proposes concentrating aid on land to make construction more affordable and avoid developer debt, at a time when there is a lot of second-hand property movement.

"The truly effective measures would be those aimed at putting more housing on the market, either through the mobilization of empty homes or homes dedicated to non-residential uses, or through activating existing developable land by municipalities," points out Reyner, who advocates for incentivizing small owners to put their apartments on the rental market without "fear." He also proposes that the public sector offer incentives to developers to build public protection housing or affordable rentals. "Limiting speculative purchases can help, but what needs to be done is to increase supply after years in which construction has not kept pace with demographic growth," summarizes Bastida.