The average tenant in Valencia struggles to pay his rent, and the average landlord owns more than one property. And Rental Prices in Valencia are hurting.
According to the recently published report Rental Housing in Spain by the Workers Union of Valencia (CCOO), rental prices in Valencia are starting to hurt one-third of tenants, struggling to pay their rent. The analysis warns that almost a quarter of a million (244,917) citizens of La Comunidad Valenciana spend more than 30% of their income on rent and that a significant proportion of them are at risk of poverty or social exclusion. On the other hand, the majority of landlords own two or more properties, and there is also an increasing number of mutual funds and construction companies entering the rental housing market.
Due to a lack of supply, Valencia City has recently become the leader in rising prices in Spain. Over the last five years, the cost of rent in the city of Valencia has doubled due to an increase in foreign demand. Rents have stabilised in recent months, but experts predict further increases as the uncertainty caused by coronavirus passes and tourism returns.
The Union’s analysis shows that the economic conditions for families who rent have worsened, and they are making an extra effort to face the excessive rents of an inefficient and speculative market. According to data from the 2019 Quality of Life Survey, 26% of people who rent earn less than €14,000 per year, 36% earn between €14,000 and €26,000 and 25% earn between €26,000 and €40,000 per year.
In the last decade, difficulties in becoming a homeowner have made renting the first option for young people, although rentals are also significant among the population between the ages of 30 and 64. In the category between the ages of 30 and 44, one third of families pay rent.
At national level, 84% of tenants taking home less than €14,000 spend an excessive percentage of their earnings on rent. It is estimated that 61% of these families are paying more than 50% of their salaries. The union study points out that two of the three tenants in this group are in a “high vulnerability” situation. According to the report, 38% are at risk of poverty and an additional 12% are very close to entering this category.
Unlike tenants, the vast majority of landlords have incomes of more than €40,000 and a low risk of poverty or social exclusion.
Of those, 34% own a home, 42%t own two properties, 16% own three houses and 8% own four or more properties. In addition, investment firms listed on the stock market (Socimi), investment funds and large real estate companies (given recent difficulties in selling their homes) have positioned themselves strongly in this segment of the market. The study specifies that large funds have been invested in 115,000 rental properties in Spain, most of which are owned by three companies: Blackstone, CaixaBank and Sareb.