Opinion And Analysis

Spain’s rental bubble causes for a shortage of flats for students

By Silvia Castro Betancourt 0 Comments NEWS, Opinion And Analysis
This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.
August is here, and like each year, this is the busiest time for students who are looking for a flat for the new academic year.
The task, already difficult in itself every year, becomes even more tortuous due to the presence of the much feared rental bubble. Prices have risen more than 10% in the last year and finding affordable housing is increasingly difficult, especially for a group that, in general, does not have an income and depends on its family for financial support. Who is profiting from this situation? Some student residences have the 'all full' sign displayed, after years of struggling to find renters. The price, looking more and more like that of single room renting or living in a residence seems to be at fault.
According to Spanish property portal, Idealista, renting a room in a shared flat has increased, on average, 7% in the last year to stand at 331 euros per month in the whole country. The city with the most expensive rooms in the country would be Barcelona with an average cost of 429 euros per month, to which we would have to add all the expenses of the property, so that the total sum could be triggered, by adding maintenance, to more than 700 euros. Just behind the Catalan capital is Madrid, a city in which renting a bedroom costs 403 euros per month.
On the other hand, the prices in the university zones are higher. According to Uniplaces, one of the platforms that dedicate its activity to renting to Spain's students, last year they moved more than "382 million euros in contracts" with an average rent of 546 euros per month to which they would have to add the utilities and the maintenance. According to these data, the cost per student would rise to the margin of 800 euros, the average price of a university residence.
Therefore, it seems that the option of this type of accommodation is gaining more and more followers. For around 800 euros, several residences in the university area of Madrid offer a double room with all the utilities and maintenance included. In addition, these accommodations include a weekly cleaning and large common areas, more typical of a hotel, such as a swimming pool or gym. For many parents who see their children go to another city to live, residence is one of the best options and the price is becoming more affordable.
Some of these living institutions have already displayed the "all full" sign, which has not been seen in years and the waiting lists keeps on growing. One of the most striking cases is that of Palma de Mallorca, a city in which, according to some users on Twitter, it is impossible to find a place to live and they have even had to "renounce the position in the UIB" because they do not have accommodations.
The large international funds have recognized the opportunity and they have begun investing in residences. In Spain, in the last year, investors have made their presence known and they have made purchases like RESA by the investment fund of AXA and CBRE GI for about 400 million euros last September. The same happened with Global Student Acommodation, which acquired Nexo Residencias last June for 180 million euros from the Oaktree investment fund. With this operation, GSA managed to obtain 2,234 places for university students in the main markets.
Join to share? Mission Impossible
However appealing, gone are the days of teaming up with several friends to find a flat to share. Housing has increased by more than 10% in the last year and multi-room apartments, where three or four university students can live, are difficult to find or too expensive. When everything is finally said and done, and an apartment fitting all the requirements is found, the word "students" triggers a warning signal among many property owners.
On the other hand, others have seen it as a business opportunity and have opted to capitalize on the student rental business. Acquiring a home to reform is for many a new form of income. Properties that originally had two rooms, upgrade to four rooms transforming common areas into bedrooms. This is the case in areas like Vicálvaro, in Madrid, which, having a campus of the Rey Juan Carlos University, sees how the houses that used to be occupied by families are now student lodgings.
Therefore, homes that could be rented as a whole for 600 or 700 euros, go to the market divided by rooms. In this way, the owners get twice the money for the property. But that is not all. The positive side of student rent is the duration of the contracts. A 'good landlord' can have the same tenants during the four years that, on average, last the duration of the renters' studies.
More demand than offer
One of the most important student rental platforms, Uniplaces, has said that the demand for rooms for rent continues to grow and exceeds the offer in some neighborhoods of major Spanish cities, as is the case of the Madrilenian district of Tetuán or the Eixample district in Barcelona.
Mariano Kostelec, co-founder and director of the company in Spain, recalls that "this increase means that in usually cheaper neighborhoods prices rise, making it difficult for young people to rent" in addition to "although the neighborhoods have accommodation, they have increased their prices which has generated a distortion between the price of the rooms and the economic capacity of the young people to rent them “.
This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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