Spain's rental costs to rise again by 2024 due to housing shortage - Spain News - Olive Press.

Rental properties in Spain will become even more expensive by 2024 due to a "minimal" supply of housing, real estate portal Fotocasa has said.

Rental values are expected to increase by more than 5% this year after record prices last year.

In the first half of 2023 in Spain was set historically high rental value of € 11.69 per square meter, which exceeded the previous record set during the real estate boom of 2007.

Higher rental prices result in the exclusion from the market of many potential tenants - up to 40% - who can only afford the lower prices.

As a result of rising real estate costs, there is a 14% increase in demand for dorm rooms due to people who cannot afford to pay full housing rent.

The Fotocasa portal claims that after a year marked by a slowdown in the real estate market due to inflation and higher interest rates, the final figure for 2023 will show more than 550,000 transactions.

Portal suggests sales could fall to more than 450,000 this year as consumers resist more expensive mortgages, but predicts things will eventually return to "normal".

The Euroborrow reduction, which determines interest rates and therefore mortgage rates, is recorded, but this can take some time to reach customers.

As for new buildings, prices will continue to rise in 2024 due to factors such as limited supply of real estate.

This is added to other factors such as financial credit constraints, land shortages, construction cost increases of about 25%, and labor shortages.

However, Fotocasa says the real estate sector will continue to be resilient, adapting to new norms, and will continue to have a strong and consistent demand for home purchases.