The API College believes that the initiative of the Valencia City Council to encourage the rental market is insufficient due to the scarce economic endowment
The College of Real Estate Agents of Valencia has detected an average drop in the rental price in the city of Valencia due to the significant increase in the supply of homes. This decrease has even reached 15% in some areas of the city. The effects of the coronavirus crisis have also been felt in the rental market, since an important part of the apartments dedicated to vacation rentals have been switched to traditional rental. “In fact, at some point the supply of rental housing has doubled compared to the start of the pandemic. Now part of that offer has been absorbed and we are 75% more in supply compared to March ”, explains Vicente Díez, spokesperson for the API College of Valencia.
The causes of this situation are the passage of homes from the holiday rental market and the significant decrease in Erasmus students, workers and foreigners who rented to spend time in the city. The fall in tourism is the main factor that explains the situation, which is why it is the Ciutat Vella area where the greatest increase in the rental offer has taken place. "The strong adjustment has already taken place, so that in the short and medium term there may be small price declines, but not new sharp drops" predicts Díez.
In addition, it makes it clear that in March there was an alarming shortage of rental housing, so now the market has not been flooded, but the situation has normalized. In addition, the economic uncertainty caused by the health crisis has caused many owners and tenants to be renegotiating rental contracts, to adjust to the needs of many people who have lost work or are in an ERTE.
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Improve rental assistance
The API College also believes that the proposal that the Valencia City Council has just presented to encourage the rental of the 50,000 empty homes that exist in the city can be improved. “This is an interesting initiative, but with a very low endowment, barely 500,000 euros when the project includes aid to improve homes that have been empty for more than a year of up to 20,000 euros. This would give for only 25 homes, which does not solve anything. We understand that it is necessary to look for mechanisms to see who the aid corresponds to, not for the first to arrive, ”says Díez.
Rejection of the API to the Rent Law of Catalonia
The Valencian Real Estate Agents show their rejection of the recent law that regulates the price of rents in Catalonia. "Experience has shown that any limitation on rental prices by regulations is always detrimental, as many owners take their homes off the market and supply is even more strangled," says the API College spokesperson.
