A growing trend is emerging in the Canary Islands, as property owners, fearing legal complications and squatting under Spain's new housing laws, are increasingly choosing to rent their properties for holiday lets or by the room long-term instead of offering entire apartments.
This trend is particularly noticeable in cities like Las Palmas de Gran Canaria and Santa Cruz de Tenerife, where the number of people interested in renting individual rooms has surged, especially from digital nomads.
Signs such as "Five rooms available, shared apartment" are becoming more common in buildings across these cities. Landlords are opting to lease their homes to several tenants rather than renting out the whole property to a single family or group.
The main reasons behind this are the uncertainty surrounding the new national Housing Law and fears of tenants refusing to leave, which has made property owners feel vulnerable to squatters, and also the fact that agency or contract fees for tenants are no longer allowed and must be paid for by the landlord.
David Algaba, manager of a real estate agency bearing his name, explains that property owners have been alarmed by the new regulations and feel increasingly at risk. "Landlords are afraid that tenants will stop paying rent," he says, adding that the usual legal recourse, i.e. going to court, is not always effective, as insurance policies often do not cover missed payments if a judge rules in favour of the tenant.
The new Housing Law, passed by Spain’s Congress, is seen as problematic by many landlords because it gives more rights to tenants, particularly if they are deemed “financially vulnerable”.
If a tenant's rent is more than 35% of their income, they are considered vulnerable by the state and may not be evicted, even if they stop paying rent. In such cases, landlords are still required to pay utility bills (electricity and water), leading to financial problems for them.
Renting by the room offers a legal advantage. Under Spain’s Civil Code, this arrangement allows landlords more flexibility and protection compared to renting an entire property, which is governed by stricter housing laws, which is why many landlords are turning to this model to avoid the potential pitfalls of renting out whole apartments.
A report from real estate platform Idealista, published this week, highlights the growing popularity of room rentals. In Las Palmas de Gran Canaria, an average of 25 people showed interest in each room rental listing during the second quarter of 2024, a 60% increase from the same period last year.
In Santa Cruz de Tenerife, there were 24 interested parties per listing, a 66% increase compared to 2023. Both cities have seen demand grow faster than the national average of 15%, with Palma de Mallorca leading with 91 inquiries per listing.
This shift toward room rentals, while offering more housing options, reflects the difficulty young people face in finding long-term lets. High rental prices and stringent requirements often push them toward shared living situations.
The demand for this type of rental has come from groups like airline employees, military personnel, remote workers, and students coming to study in the Canary Islands.
