Date: 05/01/2025
The rental market in Catalonia faces a drastic change in 2024. Large landlords and investment funds are withdrawing properties from the market to avoid signing contracts under the new price control regulations, which has generated a significant drop in supply and growing uncertainty in the sector.
Strategic Repositioning: From Rental to Sale
Different large property owners have initiated repositioning plans, redirecting their assets towards medium or long-term sales. This strategy seeks to minimize losses caused by the limitations imposed by the price control regulations that came into force in 2024.
The funds’ initial attempts to quickly sell their portfolios have faced significant barriers, such as the presence of tenants with current contracts. These circumstances have led landlords to opt for longer and more structured strategies to maximize investment returns.
Impact on Rental Supply in Catalonia
The implementation of price controls has had a direct effect on the supply in the rental market, especially in Barcelona. According to the Rental Observatory, Barcelona lost approximately 10,000 apartments on offer during the third quarter of 2024.
In addition, the signing of rental contracts fell by 17%, while cancellations increased by 5%, according to data from the Barcelona Chamber of Urban Property. This imbalance has been attributed to “legal uncertainty” and price restrictions, factors that have discouraged landlords.
The Effect on Investors and New Alternatives
Regulation has not only affected the existing rental market, but also the promotion of new housing. According to Savills, investment in new rental projects in Catalonia decreased by 90% in 2023, reflecting the lack of investor confidence in a market with high legal uncertainty.
Given this situation, investors have explored alternatives such as splitting up portfolios to sell apartments individually or reorienting Build to Rent projects towards Build to Sell, a model focused on the sale of homes to individuals or institutions.
‘Flex Living’: A Missed Opportunity
While in cities such as Madrid the flex living model (temporary rentals not subject to long-term regulations) has attracted investment, in Catalonia this option has not been consolidated due to legal limitations.
In contrast, the model of splitting up portfolios and selling to individuals continues to be a booming strategy, with some emerging investment vehicles interested in acquiring entire buildings to then sell the homes individually.
Conclusion: Catalonia, a Market in Transformation
Price control in Catalonia has generated a profound transformation in the real estate market, moving large investors away from renting and encouraging the sale of properties. This change in trend puts the balance between supply and demand in jeopardy, leaving an uncertain outlook for the coming years.
For property owners and investors, Catalonia represents a challenge that forces them to rethink their real estate strategies. Meanwhile, tenants face an increasingly limited supply and a constantly evolving market.