The rental problem in Spain “must be tackled” with more supply, not price limits!

rental problem in spain

This is according to the CEO of Ibercaja, Víctor Iglesias, regarding the rental problem in Spain.

The CEO of Ibercaja, Víctor Iglesias, has stated that the rental problem in Spain “must be tackled” by increasing the supply of rental housing available, “rather than reducing or limiting the amount of rent”. He considered that the proposal to mobilise 50,000 Sareb homes for rent to families and young people would help increase the supply.

At the Business Meeting organised today by the Spanish Confederation of Business Organizations (CEOE) and the Spanish Confederation of Small and Medium-sized Companies (Cepyme), Iglesias argued that the rental market needs to provide legal certainty and a series of favourable contractual conditions for landlords to rent out their homes. “It is more a question of creating the conditions for more housing to be rented, rather than reducing or limiting the amount”, he said.

He also defended the need to increase the supply of new housing. He specifically pointed out that in Spain there is a demand for 200,000 new homes, but only 100,000 are covered, so “100,000 more are needed”.

“In the past – say 20 or 30 years ago – there were some fantastic private developments of subsidised housing at a fixed price, which would be perfect today”, he pointed out, before stating that “it would make sense” to return to similar developments that would allow young people to buy a home at reasonable prices, with sufficient margins for the developers and guaranteed financing from the banks.

“For me, it would be about entering a new phase of social housing development. It would take the pressure off rentals”, he added.

On the other hand, he defended the strength of his institution, with “increasingly powerful” indicators in terms of its financial profile, solvency and liquidity, which allows it to “continue to pursue the ambition of having an independent project”.

He also indicated that the Ibercaja Foundation’s reserve fund has already reached more than half of its target, around €316 m, so it is expected that it will be achieved in 2024, one year before the limit for its constitution.

Banking sector resilience

During his speech at the meeting organised by CEOE and Cepyme, Iglesias also analysed the events that have occurred in recent months in the international financial system, the similarities and differences between this banking crisis and the one that occurred between 2008 and 2013, and the consequences of the new environment for economic activity and companies’ performance.

The CEO of Ibercaja began his speech by referring to the new ‘black swan’ that has taken centre stage, after the pandemic in 2020 and 2021 and the Russian invasion of Ukraine, i.e. the crisis of banking confidence that arose in the United States in mid-March with the collapse of Silicon Valley Bank, and which has also impacted Europe, with the collapse of Credit Suisse.

Unlike the 2008 crisis, according to the CEO of Ibercaja, the “rapid and forceful” action of the financial authorities has helped to prevent systemic risk, protecting the banking and technology sectors, and strategic industries in the United States.

In addition, Iglesias predicts that this crisis will be “much less severe” than the 2008 crisis and has argued that the Spanish banking sector is “much more robust” and is “more prepared” to face it “without major difficulties”, thanks to better solvency, liquidity and quality of credit portfolios.

According to Iglesias, Ibercaja does not expect the economic cycle or consumption to collapse, although there will be a slight slowdown in activity in the coming quarters.

Source: Idealista.

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