Back

Adapting to change: The rise of temporary rentals in the face of the Housing Law.

In an attempt to dodge the effects of the State Law for the Right to Housing, homeowners have turned to temporary rentals, generating a 40% increase in this modality during the third quarter of the year. This strategy has led to short-stay housing now representing 10% of all supply, and real estate agencies anticipate continued growth in this trend. 

 

The legislation, in effect since May of this year, has prompted thousands of owners to switch their homes from traditional rentals to temporary, vacation or coliving modalities. This decision seeks to circumvent price restrictions in stressed areas and limitations on the duration of contracts, especially with the entry into force of measures limiting rises to 2% in 2023 and 3% in 2024, according to the future price index of the National Statistics Institute. 

 

The supply of long-term rental housing has experienced a significant decline, with a year-on-year drop of 12% so far this year, according to Idealista. In contrast, temporary rentals have seen a 39% increase in the third quarter, now representing 10% of all homes on the market. Landlords large and small have resorted to various legal strategies to circumvent the effects of a law that mainly affects the rental of regular homes. Temporary rental, in general, is included in the Urban Leasing Law (LAU) as a use other than housing, which allows for a wide range of possibilities and durations, from months to years. 

 

In cities such as Madrid and Barcelona, where demand is strong among students and workers from other autonomous regions, temporary rentals have become a popular option. Idealista highlights that the biggest increase in these rentals has been registered in large cities, especially where local authorities have expressed interest in controlling prices. In the third quarter, 32% of rental homes in San Sebastian were temporary, followed by Barcelona with 28%. Cities such as Cadiz, Santander, Malaga and Tarragona have also experienced significant increases in this modality, while in Madrid it represents 11%. 

 

In contrast, in less stressed cities, the presence of temporary rentals is almost non-existent, at around 1%. As temporary rentals gain ground, some cities have seen a decrease of more than 10% in the supply of long-stay housing during the third quarter. Palma leads this decline with 19%, followed by Cordoba and Bilbao. Despite this, in the larger markets, the decline ranges between 3% and 7%. Ferran Font of Pisos.com points out that in some regions, such as Malaga, regular housing has experienced a drop of 40%, with a significant part of this reduction being absorbed by the temporary or tourist rental market, especially in areas with a boom in the technology industry, such as Barcelona.