This week marks one year since the enactment of Law 12/2023, of May 24, on the right to housing. This regulation promised significant changes in the residential market, especially in the rental sector. However, according to experts, it has caused a drastic reduction in supply and a significant increase in prices, affecting both landlords and tenants throughout Spain. Sitges, known for its luxury real estate market, has been no exception.
Effects in Sitges: Widespread Distrust
Since the law came into force on May 26, 2023, distrust among landlords has increased considerably. Many fear the effects of the regulation, such as legal uncertainty and difficulties in managing evictions, which has led to a significant reduction in the supply of rental housing. This phenomenon has been clearly observed in Sitges, where the supply of permanent rentals has fallen by 15%, according to the latest data.
Price Increase: A Growing Problem
The intention of the law was to stabilize rental prices, but in practice, the opposite has occurred. In Sitges, prices have reached historic highs. The average rental price has increased by 13% year-on-year, reaching 17 euros/m² per month, surpassing even cities like Sant Cugat. This price escalation has made it increasingly difficult to find affordable housing, especially in a highly demanded market like Sitges.
Changes in Rental Offer
Another notable effect has been the change in the type of rental offer available. Faced with the restrictions and risks associated with permanent rentals, many landlords in Sitges have opted to offer temporary or room rentals, which are not subject to the new regulation. This type of rental has grown by 56% in the past year and now represents 11% of the market in the area.
Legal and Economic Uncertainty
Experts indicate that the Housing Law has increased the sense of legal and economic uncertainty among landlords. Legislating against the interests of landlords ends up destroying the market, a statement supported by the fact that many have shifted their supply from permanent rentals to seasonal rentals.
The Case of Sitges: A Dwindling Supply and Growing Demand
Sitges, with its tourist appeal and luxury market, has seen the supply of permanent rentals significantly decrease while demand continues to grow. The shortage of supply and rising prices have created an extremely competitive market, where rental properties receive an average of 27 contacts before the deal is closed, 55% more than last year.
Future Measures and Expectations
The government is studying new formulas to regulate seasonal rentals and tourist apartments. However, experts and landlords continue to express concern about the possible extensions of high-stress areas, which could further aggravate the situation.
In summary, the first year of the Housing Law has had a significant impact on the rental market in Sitges. The reduction in supply and the increase in prices have made it increasingly difficult to find affordable housing in this coveted coastal town. It is crucial to implement effective solutions that balance the needs of landlords and tenants to avoid a further crisis in the real estate market.
Article by Dust and Sand Luxury Homes
