International Tenants Union calls on Spain to regulate foreign investors in real estate market

The International Tenants Union (ITU) is calling on Spain to regulate the "influence" of foreign investment in the country's real estate market.

The group want to see legislative reforms to "better protect" tenants against the "massive" increase in rental prices.

In an interview with the Catalan News Agency, the head of the organization's office in Brussels, Barbara Steenbergen, says that one of the "big mistakes" in Spain has been to "allow" the real estate market to be "totally dominated by private investors and speculators." 

On Saturday, thousands of people took part in a housing rally in Barcelona, demanding the right to affordable housing and opposing high rental prices. The demonstration was organized by the Tenants' Union, which also called for similar protests in around 40 cities across Spain. 

"It is urgent to regulate the real estate sector and control foreign investment to avoid speculation," Steenbergen points out.

"We are almost facing a total collapse of the real estate market in Spain, something needs to happen. And I can only encourage people to take to the streets to make things change, because it is time," says Steenbergen.

While the head of the ITU office in Brussels acknowledges that the housing crisis is affecting countries and cities all over Europe, she warns that access to affordable housing in Spain "is more difficult," and points out that "people who want or are forced to rent a home have very weak protection."

Steenbergen points out that in the larger cities, people often spend more than 50% or 60% of their income on rent. "This destroys families and places them at a massive risk of poverty," she warns.

One of the main problems of the Spanish real estate market, according to the ITU,  is that it is "dominated" by investors that aim to "speculate and make a profit," as well as by investors who only seek to offer short-term rentals.

Regulating short-term rentals

"The worst thing for tenants currently in the private rental market are these short-term contracts. Sometimes you only have a contract for a year, and what happens after that year? The rent goes up and you could even be evicted," laments Steenbergen. "We need a system of stabilising rents and long-term rental contracts," she adds.

According to the head of the ITU office in Brussels, it is an "indisputable" issue that short-term rentals have a "direct" impact on the housing market and that, in cases such as Barcelona, ​​they cause prices to increase by up to 50% in areas where this type of contract is more common.

"The short-term rental business has been growing, it is no longer just a room that you offer to friends or family when you go on holiday, it is a very big business and a professional investment," she explains.

Given this context, the international union calls for "very strict" regulation and even the "ban" of short-term contracts to prevent them from continuing to push "regular" housing out of the market.

The ITU also wants authorities to construct more social and affordable housing. "If you want private investors to provide social and affordable housing, there must be extremely strict rules, the same as for public and non-profit social providers."