There Will Be “More Transparency for Travelers” and Greater Scrutiny of “Volume”

Source: El Economista

The European Union (EU) will approve, during the Spanish Presidency in the second half of this year, stricter regulations for tourist rental platforms like Airbnb. This will take the form of a regulation that the Spanish government aims to be a “pioneer” in transposing into national legislation, as announced by the Minister of Industry, Trade, and Tourism, Reyes Maroto, in an interview with Servimedia.

The minister stated that the regulation will end the current “deregulation,” which currently serves as a “loophole” for these platforms. Additionally, there will be “more transparency for travelers” and greater scrutiny of the “volume” of these types of vacation homes.

“With this stricter regulation of the platforms,” Maroto commented, “we will be able to lay the foundations for both regional and local regulations that will finally regulate a phenomenon that is increasingly in demand by many travelers and is causing, in many cities, like Madrid, gentrification, but above all, an increase in housing prices due to the conversion of apartments that could be available for rent into tourist rentals.”

As a real estate asset, coliving has a lot of untapped potential. We have seen it in the United States, the United Kingdom, and other European countries. According to a study by Cushman & Wakefield, coliving could generate 550 billion euros across the continent in the next ten years. From this perspective, as an investment, coliving not only offers future prospects but also high returns that have attracted investors’ attention.

Beyond the Anglo-Saxon world, coliving in Spain has seen an increase in supply due to investor interest that has understood society’s demands. The developments in recent years in our country are partly driven by major market operators who have seen in other European countries how coliving convinces as a residential model.

The clear and evident investor interest in coliving is also reflected in numbers. As revealed by the consulting firm CBRE, by mid-2022, coliving had already accounted for 18% of the total investment in the living segment, representing more than 430 million euros and resulting in 3,900 new beds in collaborative living spaces. In response to what has been happening in the rest of Europe, it is a market in our country that still has much growth potential ahead.

Alternative Assets

In general, from the real estate perspective, we have long been observing how alternative assets are gaining a growing presence in investment conversations. Last year, they demonstrated their dynamism and the attractiveness of their returns. What we currently see in spaces like coliving is what we have seen in coworking or senior living. All of this, without a doubt, points in one direction: investor interest aligns with societal trends. The real estate market is simply trying to respond to these needs.

If, after the pandemic, we saw how offices and workspaces were seeking and finding flexible solutions in coworking that allowed them to meet their immediate needs, many young professionals, expats, and digital nomads have found the same in coliving. This is also an indicator of an investment market that has found solidity in real estate not only as a safe haven but also diverse in its possibilities beyond traditional types.