Pandemic doubles number of available flats in Barcelona
Prices fall steadily since May, down 9% from 2019
BarcelonaFew things have highlighted the pandemic as much as the ups and downs of the housing market. At the end of the year, renting a flat in Barcelona was 9.4% cheaper than at the end of 2019, according to real estate website Idealista. This indicator, which had been falling since May, was at its lowest point. Using data from this Tuesday, Idealista links this fall with a sharp increase in available flats: in Barcelona city there is 126% more stock at the end of December than at the end of March, two weeks after the state of alarm was declared.
In total, according to Idealista, there are nearly 24,000 rental apartments available in Barcelona, compared to 11,500 in the last week of January 2020 and 10,600 at the end of March. At the same time, the price per square metre was almost €14.90, whereas in January it was €16.70 and in March it was €17. The difference, apparently small, is important if we take into account that this figure has not dropped below €16 since the end of 2016.
"The stock of apartments in the rental market in big cities is the one that pushed supply throughout Spain and that is now causing the falls in prices that we can see across cities in Spain after the return to normality after lockdown," an Idealista spokesperson explains.
In Spain as a whole, the availability of flats grew by 78% between January and December, which confirms that the upturn is widespread. In fact, only ten districts in the whole of Spain had more available flats before the pandemic: among them, Lleida, which now has 1% less available housing. In Tarragona, the increase is 18% and in Girona 22%. The two provinces are far from the 93% increase recorded in the Barcelona area.
The relationship between availability and price
Although the relationship between availability and price seems obvious, UPF economics professor José García Montalvo makes some nuances. For example, the fact that there are more advertisements on a real estate website does not mean that more flats are rented, nor that the price at which the apartments are advertised is necessarily the price at which they end up being rented. What is true, he says, is that the pandemic has generated changes in supply and demand.
"It's not very clear where these new flats are coming from. Some may be moving from the tourist market to the regular market. But it is not clear that this is most of them," he explains. According to García Montalvo, there could be other causes: landlords could be putting more properties on the market sensing a rise in demand, people facing economic hardship could be putting second homes up for rent or flats may have become empty after former tennants moved outside the city, another major trend observed by experts.
Demand for flats doubles
Idealista's data, in fact, also include movements detected related to demand, which has not fallen in any Spanish province. In the city of Barcelona the interest in renting a flat has more than doubled (+113%) and in Huesca the increase has risen almost four-fold. It is precisely these two provinces that register a more pronounced increase in demand (101% and 103% respectively). In the Girona area it grew by 63%, in Tarragona by 39% and in Lleida by 23%.
The real estate industry sees this as proof that this market does not need regulation. In this case, García Montalvo agrees. "There are times when prices have to be regulated: if there is a monopoly or an oligopoly, if the seller has access to much more information than the buyer, etc. -he explains. In the rental market none of these characteristics are present". According to him, it is a market that adjusts itself, and this is what we are seeing: "A market that works more or less correctly adjusts itself; whether it does so at the speed we would like is another question".