The limitation on the price of rent that Catalonia will soon apply, following the state rule, is already having an impact on the housing market, warn from the Associació de Promotors Constructors d'Edificios de Catalunya (APCE). 19% of developers who were thinking of investing in the community to build flats have decided to move the projects from Catalonia to other areas of Spain, according to an internal survey of the entity carried out in November 2023.
They have done so as a reaction to the approval by the Central Government of the new Housing Law, which includes an income index for stressed areas. At the moment, Catalonia is the only community that has requested to apply this limit in 140 municipalities, including Barcelona. "They are taken to places like Madrid or Malaga", stressed Xavier Vilajoana, president of the APCE yesterday.
The reference price index will enter into force on March 13, as announced by the Ministry of Housing and Urban Agenda. According to the APCE, the price limitation will have the opposite effect to what is wanted, since it will "reduce the supply" of this type of property. Another 44% of the partners surveyed by the association claim that they have paralyzed investments until the context is clarified, while another 22% have reduced the planned investment. Only 15% state that the new legal scenario has had no impact on their projects. The survey also indicates that 32% of the associates have sold the rental flats they managed or have withdrawn them from the market.
According to Vilajoana, 80% of the owners of rental housing are small holders, who pay for the properties through a mortgage. The association's polls indicate that, with the rise in interest rates, the implementation of a limit on the rental price means that these small owners are discouraged and many prefer to sell the home to recoup their investments. "We are already seeing it", they say. The promoters consider that the new rule causes legal uncertainty, lack of economic profitability and difficulty in financing, among other issues.
According to the promoters, the aim of the new law, to homogenize the rental market, is "impossible". At the same time, they regret that the budgets of the Generalitat "are 10% below what is invested in other countries such as Holland, Germany, Austria and France, both in direct investment in housing and in associated policies".
Despite the criticism of the new state index, the promoters believe that it improves some points of what the Catalan Government applied for a year and a half following the law 11/2020. The state tax is calculated based on the data from the Treasury and the income data is updated, which corresponds to a large extent with the reality of the market. On the other hand, they added, what was previously applied in Catalonia was drawn up through Incasòl rental deposits, so it was more out of date.
The new system will offer a range of house rental price values across the country. They serve as a reference, as a guideline, for the determination of the rent in the new lease contracts.
