Real-estate sector slams Spanish government's rent cap system

Regional governments are responsible for implementation, but the Balearic government has said that it will not be adopting the measure as it would reduce the supply of rented accommodation and increase prices.

The real-estate sector is pretty much unanimous in its criticism of the index. Francisco Iñareta of the Idealista property website sums up opinion. "The ministry's diagnosis is wrong. The only way to tackle the rental situation is through supply, not prices. The increase in prices reflects the real problem for renting - the lack of places to rent. Dedicating time and money to an index that limits prices is adding more fuel to the fire. These types of measures make the problem greater, reducing the market even more.

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"No one can say that the government wasn't warned. Destroying available supply pushes prices up and makes access impossible for the most vulnerable groups. Continuing to believe that prices must be acted upon is not the way. It doesn't take years to prove this and the insistence on continuing with a failed policy is surprising."

Natalia Bueno of the API college of real estate agents in the Balearics questions how the ministry has come up with the index, while she believes that the government has "shamelessly" offloaded the responsibility for lowering rents onto owners rather than having an effective public housing policy.

Bueno is of the view that the declaration of a stressed area can be positive as long as there are significant tax reductions for owners who rent out properties below market prices.

At present, only Catalonia has indicated that it intends declaring stressed areas. These are for 140 municipalities.