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Fall in Spanish property prices set to accelerate

Spanish house prices fell for the first time since 2017, two of the country's largest real estate portals said.

Published: 16 July 2020 15:49 CEST

Fall in Spanish property prices set to accelerate

Photo: AFP

Existing homes – not including new builds – cost 1.9 percent less in the second quarter of the year, compared to the same period of 2019, according to Fotocasa.

In comparison, Hogaria, which has a portfolio of 1.5 million homes, reported a 2.4 percent drop in prices.

The downward trend will probably accelerate in the second half of 2020, with the sharpest falls like to be seen in rural markets, both companies said.

Mark Stucklin, a property consultant who runs the independent Spanish Property Insight website, told The Local: “The situation is in such flux at the moment but from what I have seen I expect to see double-digit falls in the price of houses this year.

“It is so hard to predict but remember after the financial crash of 2008, house prices fell around 30%.”

The graphic below is from Spanish Property Insight

READ ALSO: Where in Spain are property prices set to fall?

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VUT, AT and VV: Why Spain's holiday let categories matter to owners

VUT stands for Vivienda Uso Turístico or Property for Tourist Use, while AT stands for Apartamento Turístico or Tourist Apartment.

Sometimes tourist apartments are called VVs or Viviendas Vacacionales (Holiday Homes). They have the same rules and classifications as ATs, but are just called by a different name.

These two categories above, although are similar, are actually different and mean different things for both those who want to rent out their properties and those renting them.

The main differences are in the legal requirements, in accordance with the regulations of each region they’re located in.

READ ALSO – UPDATE: Which cities in Spain have new restrictions on tourist rentals?

What are VUTs?

VUTs can be houses, apartments, chalets or individual rooms and they can be rented through agencies or directly from the landlord. They are rented out for days or weeks at a time to tourists, but are rarely rented out for months, because then they would then be considered as tourist apartments (ATs) or long-term lets instead.

The exact amount of time they can be rented for typically depends on the rules in each different region in Spain. These regional regulations also determine if you need a tourist licence to rent out your property or if you need to register with an agency for example.

They can be someone’s habitual home, which is occasionally rented out on platforms such as Airbnb when they go on holiday for instance. Or a home that is only rented out to tourists during a particular season.

What are ATs?

ATs on the other hand are only for tourist use and are never used as someone’s habitual home as well. In order to be legal, they need to have a tourist licence, register with competent organisations, adhere to quality and security regulations and also provide services such as cleaning and possibly a reception or concierge.

Tourist apartments are governed by Royal Decree 75/1997, which regulates the legal regime for the control of tourist apartment establishments.

Again, each region in Spain has its own laws regarding these types of accommodations. Some places have limits on the number of them allowed, while others have regulations on where they’re allowed.

For example, Seville recently announced it wouldn’t grant any more tourist licences for apartments located in the Old Town neighbourhoods, while Barcelona hasn’t been issuing new ones for years.

Málaga has also introduced new rules that tourist apartments must have separate entrances and some regions only allow them on the first floor of a building.

What are the main differences between ATs and VUTs?

ATs are intended for tourism use, with usually a stay of no more than three months, anywhere above this time and it’s a long-term let.

VUTs as mentioned before are typically rented out for less than 30 days and in some regions, it can only be a maximum of five days.

If you have a VUT, it’s not required for you to provide professional services, like cleaning, although if you rent it out on a platform like Airbnb you will be expected to carry out these duties, even if you do it yourself.

But, remember the classification isn’t always up to you and what you intend to use the property for. For example, in Barcelona a tourist licence is needed for any rentals of fewer than 31 days and the property must be for tourism purposes only, therefore it can only be a AT and not a VUT.

What do I need to know regarding these classifications?

Basically, whether your property is a VUT or an AT, you need to contact your local authorities before you start renting it out to tourists for any length of time and find out what the local rules and regulations are.

If you’re a tourist, then you’ll know that ATs typically have more regulations than VUTs and offer more services, and you can be sure that they’re legal and have a tourist licence too.

If the property is a VUT and just rented out to holidaymakers occasionally, it’s important to find out what services, if any, will be included and if the property is operating legally. You can do this by asking them for their tourist licence number, if one is needed.

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