How has COVID affected the rental market in Spain?

COVID has affected the world, changing the dynamics of businesses and consumers. More than one hundred and forty countries have registered cases and this has caused health and safety issues for many industries who have since had to accommodate to the new normality this virus has brought us. Since the spread of COVID-19 caused many governments to close down their countries and shut down travelling, the rental market was one of the first to suffer the consequences, with many of their upcoming reservations cancelled or moved. Tourism and hospitality have been drastically affected by regulations and restrictions, and the rental market in Spain has not been the exception.

In economic terms

COVID has created the most devastating economic impact in the world since the great depression. The new regulations and safety concerns that this pandemic brought caused many markets to close during key months of operation, bringing down their revenues and their abilities to employ workers, causing major unemployment.

In the case of the rental market, we are already seeing a fall in rental prices, as well as a record breaking rise in the supply of rentals. This is happening because Spain’s economy is mostly dependent on tourism and the hospitality industry, which has either been closed down or limited.

The luxury market has also suffered, though not that much. This is because of travel restrictions and many countries imposing quarantine for travelers coming from Spain. Though the spanish government has been fully aware that they needed to be lenient with tourists coming into the country to rescue the drowning economy, many countries were not lenient on those tourists coming back to their home countries, because of Spain’s failed contention plan for the virus.

This has caused that there haven’t been as many tourists, so as a consequence demand has fallen. Ibiza, one of Spain’s most luxurious and expensive vacation spots saw the town missing their normal summer atmosphere, with many of their regular visitors (super yachts) missing from the ideal landscape of the Ibiza Marina. 

In the case of luxury houses, the market is slowly stabilizing. This is happening because clients are looking for homes with big patios, outside of the main city and with more competitive prices than ever.

In health and safety terms

The rental market in Spain has changed since the pandemic started in the last months of 2019. Since then, Spain has implemented new regulations for travelers and the hospitality sector.

For travelers, Spain recommends that if you are in good health when you arrive you resume life as normal and to be vigilant of your health during the next 14 days, as well as self isolate in case you come up with any symptoms.

For the hospitality sectors, the spanish government recommends that check in clerks give all available information on health and safety to travellers as well as facilitating medical consultations, social-distancing measures and cleaning protocols.

Bars, restaurants and kitchens need to make sure clients disinfect their hands as they enter the establishment, as well as make sure that there is an adequate disinfection of dishes and utensils.

In the case of hotel rooms, apartments and other rental properties and their cleaning protocols, there has to be a disinfection schedule as well as the availability of cleaning materials.

In government and policy terms

The government has introduced new travel restrictions, which are more lenient but still require that the person travelling be subjected to a health check, which may include having their temperatures taken, checking their documents as well as a visual examination of the passenger’s state of health. This includes carrying a health control form (FCS) that is necessary for entrance.

We are also seeing a change in legislation, with new policies in places like Catalunya that let renters add clauses in their contracts to be more lenient with tenants if there is a new confinement.

The spanish government has added a regulation in which no more than six people can be together in one closed space to avoid the spread of the virus, as restaurants and bars now have to close at 11pm.

There are also talks that following the state of emergency, Madrid will enter into a mandatory curfew and Ibiza is already the center of the pandemic in the balearic islands, with talks of closing down the island.

In travel preferences

Since the pandemic started, travel preferences have shifted, with more people preferring villas to apartments. In the case of the Spanish rental market, we have seen that travel preferences have remained the same in terms of destinations, but what travelers are looking for in those destinations has changed.

Ibiza, once the perfect party island, is now a hub for adventure and luxury travel. Since Covid, the boat booking conditions in Ibiza have become more flexible than ever, with many companies offering their clients re-booking options for the 2021 season.

Spain recently opened up again, and there will always be people who wish to fulfill their dream of living in Spain. This is why optimism has not died and the luxury market in Spain is proving that being optimistic is working for them, with many hoping for a fully booked 2021 season.