Today I bring you a very personal reflection regarding a part of our work in NUWE. The situation of the real estate market is of interest to everyone. On the one hand there are the professionals, on the other the clients and we cannot forget a very essential leg to stand on at this table: the Housing Law. Yes, you will see that I do not include holiday rentals as a fundamental part of an equation whose result is the excessive increase in prices both in the sale and purchase of homes and in rentals.
I will give you three facts about ValenciaIn 2020 we estimate that on average there were 20,000 homes for sale, a few years ago the figure was less than 8,000; today it is around 4,000 homes for sale. Why do we have such high house prices and it is not the stigmatised holiday rentals that are to blame?
Let's start at the beginning. Some time ago we decided in NUWE to reorganise our property portfolio and to move away from the buoyant rental sector. We opted for a counter-current measure because our professional ethics make it impossible for us to comply with the 100% of the new Housing Act vis-à-vis clients and tenants. We cannot charge the tenant the real estate commission and we are not going to camouflage other services to the client in order to 'get' that amount according to our work. If there is one thing we want to characterise NUWE is transparency in the way both parties act, a situation that is impossible under the law passed by Pedro Sánchez's government.
Housing Act
The regulatory text is self-explanatory. It is a compendium of measures that are completely contrary to the real interests that we see in the market. But just so you can see that this is not a political issue, I will refer to something so basic that we have encountered in our day-to-day life in NUWELandlords no longer have any kind of legal security in the face of squatting or non-payment by the tenant. What does this mean? Faced with the very real possibility of a rental ending badly, the landlord chooses to close the flat or look for a safer alternative.
Thus we find the rapid proliferation of homes, and even commercial premises, being converted into holiday rentals, but are they really the problem or the easy way out of such a paradoxical situation?
Holiday rentals
Yes, the latest data, for example from the city of Valencia, shows a very notable increase in the number of applications for holiday rental properties, but is this the real problem? Let me give you an example: in Ciutat Vella no licences are granted for new hotel and holiday rental openings. According to this logic, we could say that it is a relaxed neighbourhood, that there is no official pressure from this new concept of renting private homes for a few days. What if the problem is really the shortage of housing?
Foreigners
Since we stopped working on the renting in ValenciaWe have encountered clients who wanted to be able to rent their property but were not confident about the social situation. In other words, we have owners who want to rent a property but have to look for other options because they do not have sufficient legal security to ensure a return on their investment. This is where the foreign buyer comes in. The national owner, faced with the difficulties that renting would entail, opts to put the property up for sale, an opportunity that currently only foreigners can afford.
Now because European Central Bank interest rates have been slightly loweredBut the reality of the sector is that the national client is characterised by making investments based on the granting of credits. If these are now at high interest rates, the economic muscle is nothing compared to the capacity with which buyers from outside Spain arrive.
So our national client sells the property because it is his only option to make a profit at the moment and it is usually this new foreign owner who uses the property as a second home or holiday rental.
Conclusion
If the price of housing has risen, it is because there is a shortage in the market, because homeowners are opting to save their rental or sale options in the face of a completely uncertain scenario in which they are at a clear disadvantage. We could even say that these are people with the capacity to hold on in this way until there is a change in the market. Housing Act that is less harmful to their interests. But if I am publishing this post it is precisely because those "interests" that I was telling you about now are really those of society as a whole. If we do not ensure that homeowners have legal certainty when it comes to going to the market, housing prices will continue to be unsustainable. It is that clear. We are at a crucial moment and for a tenant to have more rights than a homeowner only translates into undue tension in the housing market.
