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What will happen to the housing rental market after the Coronavirus? Supply and demand analysis

Articel Resume:


  • In recent weeks we have interviewed several owners of rental homes to estimate the % of families in a state of economic vulnerability due to Covid-19.
  • Up to 20% of families living for rent may be in this situation.
  • ↘️ There is less demand from people who have lost part of their income.
  • ↗️ There is a greater offer for properties that were for tourist rental and now go to residential rental.

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We are in a problematic time due to Covid-19. Many things are happening right now on our planet. Everything is full of uncertainty.


One thing is for sure, many people cannot work due to the social distancing we are experiencing. This causes there to be economically vulnerable families due to Covid-19. According to our research on the real estate market, and after conducting interviews on a sample of 300 homes, up to 20% of families in Madrid could be in this situation. Data still to be confirmed by the competent authorities.


Given the extraordinary nature of this situation, We put our all market knowlege at your disposal . 


For people in vulnerable situations, we wish you courage, strength and perseverance! Keep reading, in this article we will talk about things that may be of interest to you.

And if, on the contrary, you are the landlord of one of these families, you will ask yourself:


What to do if your tenant cannot pay the rent due to the Coronavirus?


In view of the situation, on April 1, the Government of Spain has approved a series of measures to help these people in a vulnerable situation to pay their rents, in summary they are:

  • Suspension of the eviction procedure.
  • Extraordinary extension of habitual residence lease contracts.
  • Automatic application of the moratorium on rental debt in the case of large holders and public housing companies or entities.


If you want more information, you can see the BOE in this link   or ask us directly and we will explain all the details. You can write a comment or call us at +34630511855.


And now, let’s imagine the future.


What will happen to the housing rental market after the Coronavirus? Supply and demand analysis


A few months ago a friend rented an apartment in the Trafalgar neighborhood in Madrid.

Recently, in the midst of a pandemic, he has called us to advise him on moving. He wants to live in a better home paying less money. Can our dear friend make it? The answer is resounding: YES.


The demand for rental housing


The behavior of demand throughout the annual cycles

According to our experience of the last 5 years in the Madrid real estate market, there is a trend in which the first two months of the year generally have fewer rental closings, a trend that changes throughout March, April and May, and that it continues through the summer to finally rest a bit at the end of December.

Market movement during quarantine


Since the State of Alarm was decreed, the population went into hibernation, wondering how the Coronavirus will affect the real estate sector? and the real estate market was completely paralyzed for a few days. As the panorama became clearer, it has gradually reactivated, but still with much less intensity than at the end of February 2020. There is also less demand than in April 2019.


There is a part of the rental demand severely affected. The demand has decreased.


The rental offer

In relation to the offer, the opposite phenomenon occurs, the offer increases because a large number of homes dedicated to tourist rental will now be offered in the market of habitual and permanent homes.


Less demand and more supply has a clear effect: lower rental prices.


How much will the rent go down?

Until now, the trend in demand has been on the rise, and proof of this is that according to data from the National Institute of Statistics or Instituto Nacional de Estadísticas (INE), There has been an increase of 300,000 homes in Spain in the last 5 years, causing an increase in prices.

Due to the unprecedented circumstances, the fluctuations in the behavior of the market have been very particular. Therefore, we will have to wait a bit to analyze the transactions that will occur before saying an observed reduction percentage. For now, it is good for you to know that if you are a solvent tenant, you will surely be able to get a good price in 2020.


When will they go down? How long will this situation last?

Movements and changes in the supply and demand for real estate oscillate at slower rates than other markets, such as the stock market. However, it has been observed that a small decrease in rental prices has already begun in some real estate portals such as idealista, Fotocasa and piso.com. This trend does not have to be definitive and it will be necessary to continue observing the market to confirm it.


Why can housing rent go up again?

  1. Until February 2020 we came with an equally thriving demand in many areas of Madrid.
  2. Due to the Coronavirus, many people have managed to consolidate teleworking. These people will have a little more budget to look for housing because they will save between 50 and 100 euros per month on transport and will want to live in larger places, with an office and access to a garden or terrace.


What if I still have a question?

For Geräh Real Estate Partners the first thing is to help people. If you have any questions about these topics or need any information, remember that we are here.


We hope this article has been of interest to you and we invite you to give us your opinion in the comments, what do you think will happen to the housing rental market after the Coronavirus?


Be sure to share this information with any friend who may be of help to you, they will surely appreciate it.


Thank you for reading us.


Credits: Cover PIC – Martin Sanchez on Unsplash


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