As elsewhere, Mediterranean Spain has experienced a drop in property sales, giving rise to a real estate investor’s dream ticket; greater variety and lower price. The drop, which many see as temporary, has had a windfall for vacation home owners: It has fueled a 157 percent increase in vacation home rentals.
In 2009, job and financial insecurity saw an increase in the number of Northern Europeans, North Americans and South Americans, choosing to stay at home; vacation in your country of origin. Demand for holiday home rentals in Spain has also increased as the focus is on reducing holiday costs and increasing the holiday experience.
The trend towards vacation home rentals has brought relief to those who bought homes along the bustling Mediterranean coast. Traditionally, not being used for vacations, many properties remained empty. It was still a good investment at a time when values were soaring. As the credit crunch began to hit deeper, homeowners withdrew, soon opening their vacation homes to the burgeoning rental market. This was seen as the ideal solution to help make ends meet and cover expenses. It is estimated that twelve weeks of vacation home rental will cover your financial obligations; the rest is profit.
Rentals cheaper than vacation packages
The year 2007 was the first in which vacation home rentals outsold package tours; a trend that continues. Since then, budget-conscious tourists have been doing their arithmetic. Those whose access to credit had dried up and couldn’t buy, or were inclined to book a hotel, found they could save money by renting instead of buying. Additional side effects include greater choice of location and more independence.
By sharing the costs with family or friends, even greater savings can be achieved. According to a vacation home website, which saw a 30 percent increase in orders compared to last year, the increase in bookings is partly because rentals are up to four times cheaper per square foot than vacations in hotels.
An expert speaks for many when he says; “It’s the perfect blend of convenience for struggling vacation home owners and working vacationers on a tight budget. The result is that it’s helping property sales. Until recently, buy-to-let hasn’t been a part important market. This is now.” One in ten homeowners who offer their homes for rent say the economy adds up; the main objective is to cover expenses.
The Spanish coasts offer the greatest potential
Statistically, Prague offers the best value for money. Will the Spanish property market close the gap? For many it is a no-brainer. The Spanish government is modifying housing regulations, which until recently weighed heavily in favor of tenants. It could take up to a year to evict a trespassing tenant. This has been legislated up to one month’s notice; Within one month to vacate the premises. This is compounded by the fact that it is becoming easier to prosecute the occasional dishonest tenant for unpaid rent.
Increased security will release tens of thousands of villas and apartments onto the rental market; increased competition will drive rents down to a sustainable level to benefit both landlords and tenants. The trend will also give homebuyers greater security.
During the first quarter of 2009, the Spanish Coasts, the Costa Azul and the Canary Islands were represented in the Top 10 destinations chosen by travelers. Of the fifty most searched places at the beginning of 2010, Spain checked the first three boxes: Málaga (Costa del Sol); Tenerife in the Canary Islands; and Alicante, the main airport hub of the Costa Blanca.
Family holidays continue to represent the majority of rental holidays (53%). Closing the gap are gatherings at 38%: Party and holiday events attract 25%. There is also growing interest from the business sector, which seeks to reduce costs by opting for cheaper alternatives to hotels. A rented vacation home accommodates ten staff members; with on-site maid, hotel costs are reduced by up to 70 percent.
