Increasing Prominence of Tourist Accommodation
Tourist accommodation is becoming increasingly significant in the spheres of politics, society, and real estate. This trend is particularly noticeable at a time when tourism is at its peak and there is a scarcity of long-term rental properties.
Bank of Spain’s Analysis on Holiday Accommodation
In light of this situation, the Bank of Spain has conducted an analysis of the impact of holiday accommodation in the 25 urban areas with the highest concentration of holiday rentals in their respective rental markets.
Elche and Marbella Lead in Holiday Rentals
The primary conclusion drawn from the analysis is that Elche (Alicante) and Marbella (Malaga) are the towns where holiday rentals are most prevalent. According to the financial supervisor’s presentation at an economic meeting in Extremadura, these two locations top the national ranking.
Elche and Marbella’s Holiday Home Proportions
Elche is the city with the highest proportion of holiday homes in its periphery, accounting for almost 70% of all rental properties. Marbella, on the other hand, is notable for having the highest density of tourist accommodation over rental properties in its urban centre, with more than 60%. The Costa del Sol city also has the second highest proportion of holiday properties on the outskirts of its urban area, after Elche, and followed by Malaga. In both cases, the weight exceeds 50%.
Tourist Accommodation in Other Cities
In the other towns and cities analysed, however, tourist accommodation accounts for less than 30% of the market. And their weight is reduced in cities such as Madrid or Barcelona, where they represent less than 5%.
Higher Density in Outskirts than Urban Centres
Another insight from the Bank of Spain’s presentation is that most towns and cities have a higher density in their outskirts than in the urban centres, with the sole exception of Marbella.
Selection of Urban Areas for Analysis
The 25 urban areas analysed are Madrid, Barcelona, Valencia, Seville, Bilbao, Malaga, Zaragoza, Mallorca, Murcia, Gran Canaria, Granada, Vigo, Santa Cruz de Tenerife, Alicante, Valladolid, A Coruña, Pamplona, Santander, Cordoba, Marbella, San Sebastian, Oviedo, Gijon, Vitoria and Elche. Their selection, according to the Bank of Spain, is because these 25 largest urban areas had the highest ratio of tourist accommodation in August 2023 compared to the latest available figures for the number of residential rental properties at the municipal level.
Impact of Holiday Rentals on Housing Stock
Last week, the organisation chaired by Pablo Hernández de Cos published its ‘2023 Annual Report’, which included a special section on housing to examine the problems affecting the residential market and to propose measures to help improve access to housing.
Spain’s Housing Needs and Government Measures
In the document, the financial supervisor estimates that Spain needs 600,000 homes by 2025 to balance supply and demand and criticises the latest government measures in this area, such as controlling rents or implementing Official Credit Institute guarantees to help young people and families with minors to buy a property, considering that they will have negative consequences.
Tourist Apartments’ Share in the Rental Market
It also explains that tourist apartments now account for around 10% of the rental market and have an estimated ratio of 1.8% of the total number of main homes in the residential market, with some 340,000 homes. And it mentions the boom in holiday rentals in recent years as one of the factors that is reducing the stock of properties available for long-term rental, together with the appearance of formulas such as temporary rentals or room rentals or new regulations, with rent caps or more protection for tenants in situations of non-payment.
Aggregate Housing Stock in 2023
In this sense, he maintains that “in 2023, it is estimated that there will be an aggregate housing stock of around 27 million units, of which 19.3 million (72 % of the total) will be primary residences. The rest of the available housing stock, some 7.5 million, is distributed among several uses such as second homes, unoccupied properties, and tourist and seasonal rentals. In recent years, there has been less dynamism in the new housing stock for residential use. This has led to a significant increase in converting second homes into primary residences. At the same time, the emergence of new housing uses, such as holiday homes (both owned and rented), and the rise of alternatives such as seasonal and room rentals would contribute to a slower growth in the supply of residential housing in its usual format. Recent regulations to limit tourist rentals in some areas and increase protection for lower-income tenants could contribute to a shift in housing supply to these alternative uses. In particular, there is a rapid growth in the share of seasonal rentals – typically between 1 and 11 months – which would present a looser and more favourable regulatory framework for landlords. Overall, the housing stock is growing at a slower rate than the demand for its main uses”.
Concentration of Tourist Accommodation
On tourist accommodation, he adds that, despite having a modest weight at national level, “this activity is heavily concentrated in the main tourist areas, in certain urban areas (such as Malaga, Marbella, Elche and Palma de Mallorca) and large city centres with the most tourist activity (Barcelona, Madrid, Seville and Valencia). According to the economic literature, those neighbourhoods in which there is a greater concentration of tourist rentals (which displace residential housing) are experiencing greater relative increases in house purchase and rental prices”.
Regulations on Holiday Homes
The financial supervisor also recalls that in some areas of Spain, regulations are being tightened to limit a boom in holiday homes, although it recommends analysing the issue in depth and taking into account the economic impact they generate.
Price Difference in Tourist and Non-Tourist Areas
As mentioned above, the Bank of Spain states that “according to the economic literature, those neighbourhoods where there is a higher concentration of tourist rentals (which displace residential housing) experience greater relative increases in house purchase and rental prices”. This is also confirmed by a CaixaBank Research study, which shows that the price gap between tourist and non-tourist locations is at an all-time high.
