The president of the API of Girona, Joan Company, made a statement in the Diari de Girona where he made reference to different points of the real estate sector, with special emphasis on the new Rental Reference Price Index, which makes a negative assessment, since classifies the measure as a patch and that it does not address the major underlying problem which is the low supply of housing on the market.
The new index system that limits the rental price is now in operation. Will we see prices drop from now on?
We do not value this measure too positively. Yes, it is true that surely due to certain areas and contracts the price will go down a little, but there is a significant problem of lack of rental apartments and this will not solve it, rather we will go in the opposite direction.
Why do you think you will get the opposite of what you are looking for?
These types of measures discourage the rental offer and there will be owners who will choose to put the apartment for sale or to use it for seasonal rentals, students... We are increasingly seeing that fewer rental contracts are being signed, there is less supply. Furthermore, in some areas we have seen that for months this index has been talked about, the price of the latest contracts has increased significantly more than what would be necessary to have a higher starting price for future contracts and future references. Since the index is applied only to new rental contracts in these 140 municipalities, it is by importing the price of the last contract, because whoever is not a large holder, the reference is not the index, the reference is the price of the last contract.
With all this increase and with the index on the horizon, were these apartments still being rented?
It was not known exactly and whoever needs an apartment needs it, you can't wait. Yes, these weeks there have been tenants who have told us to wait, but this was now when the index was published.
Have you made it clear that you believe this rent cap will not work, but what measures are needed against price escalation?
We think it will go in the opposite direction because there will be less supply and, therefore, also less turnover. People will not move from the apartment where they are because of the difficulties in finding another one. What we have been demanding for a long time is that we should work on a national housing pact throughout Catalonia. All parties involved would have to try to agree to work on structural measures. This law that limits rental prices are electoral measures, purely political measures. This is very good, but we are not solving the problem. The housing problem is not a problem that can be solved in the short term, a more medium and long-term look is needed with structural measures.
What do you mean by structural measures?
It means that while we do not achieve a social housing stock as there should be, which obviously cannot be achieved in the medium term, because we are very behind, who should provide this affordable housing is the private sector. The administration would have to facilitate the private sector with compensatory measures to provide rental apartments at affordable prices. Compensations of all kinds, they can be fiscal, they can be subsidies to make improvements...
Couldn't this measure also cause demand to shift to the nearby towns of these stressed municipalities and, therefore, this is also the fish that bites its tail?
If demand increasingly shifts to neighboring towns, it will cause a bubble effect in the neighboring towns and at some point they will become tense areas. That is why we complain that we are not addressing the underlying problem, they are patches and more electoral measures that do not address the root problem. The administration neither listens to us nor takes us into account when legislating and adopting measures.
Do you think, however, that with the situation in the real estate market, the administrations have to intervene?
I think so. Housing is a first necessity and everyone has to have the right to housing, therefore, we have to intervene in the market, but with structural measures that solve the problem in the short, medium and long term.
Everything and the drop in sales operations in the last year, is the situation better than that of the rental market?
It is true that during 2023 compared to 22, there have been fewer purchases and sales, mainly motivated by the increase in interest rates. 2022 was a very good year, and therefore if we compare it with 2019, we are right there. The buying and selling market is at a time as we would like it to be normally, with a certain stability.
Another measure that some voices have classified as electoralist are the ICO guarantees for young people to buy a first home. What do you think?
This is a positive measure. We will have to see, but initially we value measures of this type that make it easier for young people to afford the purchase of a flat. There are young people who have working conditions that allow them to pay a mortgage payment, the problem is always at the entrance.
And how will the regulation of tourist apartments affect the market?
The call for elections has ruined everything for us. There is the decree that had a brutal impact, and it is in force, but simultaneously a bill was being processed that had to replace this decree. As of the call for elections, the bill disappears and the decree, which has brutal effects, will continue to be in force. It is no longer possible to ask all municipalities that there is a significant supply of tourist rentals.
