Catalonia, the Spanish experiment of the rent limit: "Prices do not fall because of the law, but because of Covid"

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• MARÍA HERNÁNDEZ

  Madrid

Sunday, 1 November 2020 - 21:57

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• Limits on rent.

  Iglesias knocks out Calviño's opposition, winks at Catalonia and angers the sector

The Government has just set a date to limit the price of rents throughout the country.

It will happen at some point in the next four months, as demanded by the second vice president,

, but the measure will not be a pioneer in Spain.

a law

to cap the rents of tenants and in this time, some market players have taken the temperature of its consequences:

are some of the pointing effects.

Without forgetting the prices.

According to the data compiled by

for

, the rental price in Catalonia fell by 0.9% in October, although on a year-on-year level it

The figure contrasts with the falls registered in the same period in the

, in the Balearic Islands (-6.8%) or in the Canary Islands (-2.2%) and puts the question on the table of the effectiveness of the standard.

If the focus is reduced to

, one of the cities where tenants have suffered the most tension in recent years, rents show a fall of 2.2% in monthly comparison, a percentage in line with the -2% that was registered in the city of Madrid, also in October and without rental limitations.

"The law arrives late in Barcelona because the city had already begun to empty before. There are no students or tourists and with teleworking, many people were already leaving for the metropolitan area and more rural areas," says

, spokesperson for the Catalunya de Garraf Real Estate Association and member of the Federation of Real Estate Associations (FAI).

Rius concedes that

The law arrives late in Barcelona because the city had already begun to empty before.

There are no students or tourists and with telecommuting, many people have left

Josep María Rius (FAI)

The city is a very particular case within the region.

"What happens in Barcelona is that there is no demand for the prices of houses and owners have to lower them to be able to rent them. Now it is difficult to find tenants for a house for more than 1,200 euros a month, something that was previously unthinkable", Rius comments on the other end of the phone.

All the sources consulted point in that direction.

Prices in the Catalan capital were already falling before the price cap, and even before the coronavirus crisis, although the pandemic has accelerated that trend.

At a year-

year level,

.

"In September, Barcelona

, therefore, it was already a trend in the rental market in the city and it was to be expected that it would continue to register falls after the large increases in the last years ", they explain from the real estate portal.

"The fall of 7.3% in October may indicate, on the one hand, that the new regulation is having a certain effect, despite the fact that the market in Barcelona has already been registering falls for months, but also that the supply has grown significantly in the In recent months, demand is down because it is moving to the outskirts of large cities, "says

, Fotocasa's director of Communication and Content.

Complaints and confusion

Beyond Barcelona, ​​confusion, misunderstanding of the norm and complaints spread among owners and tenants.

says

, CEO of

(Association of Rental Home Owners).

Complaints from owners who do not understand how to cope with the new conditions come to their offices these weeks and are wondering if it compensates them to continue putting their homes on the market.

"We fear that this price limitation will further reduce supply and that is what is least convenient for us, because if demand slows down but supply comes out of the market,

" says Toribio.

From their experience these days, many owners are withdrawing their homes from the rental market, either to sell them, "because it pays them more economically", or because they prefer to wait for the situation to clear up and have freedom to establish their income.

The law for the regulation of lease contracts approved by the Catalan Parliament was born surrounded by controversy over the

.

An opinion last August from the Council of Statutory Guarantees of the Generalitat established that the rule could violate several precepts of the Magna Carta and now all eyes are on the route of this route.

Until that point is clarified, the reality is that the price limitation has mainly affected newer homes with better benefits, which had higher prices and now must readjust to what is marked by the indices.

"Some owners have accepted it, but many others prefer not to rent them under these conditions and withdraw them," explains Rius, who operates in the Sitges region.

On the contrary, those who have properties in worse condition choose not to reform them because it does not compensate them for the rent they receive.

The result in the medium term is a

.

Black market risk

Other consequences are already evident.

"The signing of many contracts that were about to be closed due to the confusion generated by the change has been postponed," explains

, CEO of

.

Carroza also warns of the risk of promoting

"There are owners who are beginning to request that they sign leases for 11 months, instead of a year."

This type of contract would be considered seasonal, halfway between tourist and residential, and would not be subject to the rule that limits prices.

As a counterpoint, however, tenants cannot register in the town where they reside.

There are also those who request that a part of the rent be charged outside of what is stipulated, thus promoting a kind of

in the manner of what happened in cities like Berlin.

These are some of the

of the law, in the words of Josep María Rius, in addition to the

that has been generated.

"Investors are reluctant to buy a house because they think they are going to have problems renting it and they prefer to take their money to other places, like Portugal," says Carroza.

Whether for one reason or another, the main injured party will continue to be the tenant, who will have less offer to choose from.

But there is more.

Beatriz Toribio warns that "the law may hinder access to housing for groups that are experiencing more difficulties with the crisis, for example young people or families with lower incomes, because the owners, when choosing their tenant,

According to the criteria of The Trust Project

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