New study shows effect of regulating holiday rentals on residential housing supply

  • Canarian Weekly
  • 10-07-2024
  • National
  • Photo Credit: CW
New study shows effect of regulating holiday rentals on residential housing supply

Latest studies suggest that regulating holiday rental properties in the Canary Islands could significantly increase the availability of traditional residential rental properties in both provinces.

The potential shift of properties from the holiday rental market to the residential rental market could boost supply by 9.7% in the province of Las Palmas (Gran Canaria, Lanzarote, and Fuerteventura) and 6% in Santa Cruz (Tenerife, La Palma, La Gomera and El Hierro).

The research, conducted by the Rental Observatory of the Fundación Alquiler Seguro and the Rey Juan Carlos University, analysed data from the National Statistics Institute (INE) and Airbnb across Spain.

The findings indicate that reassigning holiday rental properties on residential complexes or that are classified for residential use, back to long-term rentals could increase rental property availability by over 24% in central Madrid, 20.9% in Málaga, and over 10% in several districts of Barcelona and San Sebastián.

While this shift would increase the number of rental properties available, the Observatory warns that it would not be enough to solve the housing problems in major cities. The impact of holiday rentals on the overall housing market is highly uneven, with a more significant presence in coastal areas and city centres, and less influence in residential and peripheral areas.

Given these findings, the Observatory advocates for regulation rather than market intervention to avoid further limiting the supply. They emphasise that the proportion of holiday rentals compared to residential rental properties is less than 10% in most cities, including Palma (Majorca), Bilbao, and Santa Cruz (Tenerife).

The study highlights the potential benefits of redirecting holiday rentals to the long-term rental market in increasing property availability for residents. However, it also highlights the need for a balanced regulatory approach to address housing shortages without negatively impacting the market.