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Barcelona High Prices and No Space

May 25, 2008
Increasingly large numbers of Europeans flocked in search of Barcelona apartment rentals, whether for a Barcelona holiday apartment by the sea or in the Old City, or short-term apartment rental for longer periods. No city is more popular a destination for European immigrants and holiday makers continuing into today.

The upshot is a problem of affordability and space. Rapid population growth coupled with tourism in Barcelona have resulted in a housing shortage, and sharp rent inflation. Sandwiched as it is between a mountain range and the Mediterranean Sea, Barcelona cannot leak into an unending urban sprawl. Barcelona accommodation is a scarce commodity growing scarcer.

With money to be made in Barcelona holiday apartment rental and Barcelona short-term apartment rental, the balance between accommodating visitors and locals is proving difficult to address. House prices have risen so fast, local people find it difficult to continue living there. Young people struggle to find a home in the area they grew up, while low-income families live in often overcrowded or unsuitable conditions.

While Barcelona house prices including apartment rental prices have risen drastically over the years since the 1992 Olympic Games, the average cost of renting in Barcelona remains lower compared to some other major European cities. This relative level of affordability and Barcelona's reputation for great urban spaces - winding streets lined with restaurants, bars, boutiques, and leafy trees - have kept the visitors visiting. For those who stay for months or even a few years, renting is the best option. Renting is also the logical first step for those who seek to remain and buy their own home in the long term.

Many if not most private landlords are represented by agencies with a sting in their tail: Due to Barcelona's housing shortage, agencies are able to charge hefty agency fees. Typically equal to the cost of one month's rent, agency fees are paid for the privilege of securing your Barcelona short-term rental (typically arranged on a yearly basis, although six-month contracts are often available). It is desirable, but often more difficult, to rent a Barcelona apartment direct from the owner.

But it's not all fun-and-games for the property owners and their representatives. Spanish housing law still offers a high level of protection for tenants, and it remains a slow process for landlords to evict tenants with rent arrears. For this reason, agencies and landlords normally require proof of paid employment - normally a payslip - from new tenants. New tenants without proof of steady earnings can be required to pay several months rent in advance, or else a friend or family member may be able to act as a guarantor to guarantee rent payments. But whether buying or renting, it's increasingly a rich man's game.

In today's market-driven global economy it is clear urban renewal rarely reflects the needs of local communities. A positive impact on house prices means increased house prices, which logically means local residents are priced out of the market. In Barcelona, international residents and property investors have benefited most, while local residents have suffered the brunt of the booming housing market and enhanced status of their city.
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