The average rent price has fallen for the first time in years in Catalonia and this precisely in the municipalities where the rent control of the Housing Law applies. As the Generalitat announced last week, in the cities declared under tension, Barcelona in the lead, monthly payments fall by 5%, while in the others, the price remains the same.
While waiting to see how prices will evolve in the future, the Generalitat celebrated that the price cap is already showing a certain impact on the rental market during the first quarter of its entry into force, between April and June 2024. In the 141 Catalan municipalities that were declared stressed areas, the average rent amounted to 865.56, a decrease of 5% compared to the previous quarter and 0.1% compared to the same period of 2023. However, in the rest of the localities, those which do not have limited prices, rents increased on average by 0.6% over a quarter and by 1.7% over a year.
According to data analyzed by elDiario.es, in 79% of the 141 municipalities with a rent ceiling, the average price is decreasing. While in 21% it is one in five people, it continues to increase. Among the first, cases like Cornellà de Llobregat (-14.7% over a quarter), Ripollet (-11.3%) and Sant Joan Despí (-11.3%) stand out. In the second group, cities like Sitges (+15.5%), Molins de Rei (+10.8%) or Sant Pere de Ribes (+9.5%) stand out.
The other side of the entry into force of the price ceiling, the negative note – as recognized by the Generalitat – is that the rate of contracts signed has fallen much more pronounced in the municipalities declared tension zones than in the others. Even if a decrease in this area has been observed for months, it now reaches 17% in the 141 regulated localities, compared to 1.6% in those which are not.
Contract signing falls by 17%
The other side of the entry into force of the price ceiling, the negative note – as recognized by the Generalitat – is that the rate of contracts signed has fallen much more pronounced in the municipalities declared tension zones than in the others. Even if a decrease in this area has been observed for months, it now reaches 17% in the 141 regulated localities (24,543 contracts signed), compared to 1.6% in those which are not.
According to the Minister of Territory, Sílvia Paneque, this “significant decrease” is due to the transition from conventional rental to seasonal rental, even if in many cases it is a fraudulent alternative. “This highlights the need to regulate temporary housing so that this deviation cannot exist,” he noted.
This diagnosis is shared by the Sindicat de Llogateres de Catalunya, which also attributes this drop to a lower turnover of rental apartments, that is to say to greater stability of tenants. This figure, however, constitutes ammunition for owners and real estate associations, who are seeing a drop in rental supply due to regulations that they denounce do not encourage owners to rent their accommodation.
The data published by the Generalitat correspond to those from April to June 2024, the first quarter in which the price limitation was in force – it was published in the BOE on March 15 -. Catalonia was then the first autonomous community to declare the majority of its large municipalities as a zone under tension with the price cap, a condition which it retained alone until the Basque town of Errentería was added to it in September.
Thus, rent regulation has affected 141 Catalan municipalities since March, including those in the entire metropolitan area of Barcelona, as well as the provincial capitals (Lleida, Tarragona and Girona) and most medium-sized cities. In addition, by mid-April new cities were added until reaching 271, or 90% of the Catalan population.
In all these municipalities, in accordance with the Housing Act, new lease contracts – whether rent renewals or new tenants – cannot exceed the price of the previous one. And in the case of large landlords, those with five floors or more, they are even obliged to lower the rent if it exceeds the national rent price index.
This is not the first time that Catalonia has analyzed the impact of rent capping on prices and signed contracts. Between September 2020 and February 2022, another similar regulation was in force in the community, approved by Parliament and which was ultimately annulled by the Constitutional Court. During this period, strongly conditioned by the emergence of the pandemic and its impact on the real estate market, a drop in prices was also observed, but what has generated more discussion – not completely resolved – is whether it caused a collapse in supply.
