Seasonal contracts as a solution for longer stays
The current situation of the rental market in Barcelona and how it can be improved with seasonal rental contracts of more than 11 months' duration.
I imagine that the owners of Barcelona and surroundings have already studied their possibilities to circumvent the current Housing Law and the price index of the Generalitat, or the state, well, it is less and less clear who is in charge. We have only a few weeks with the new law and the market is already a lot, there is practically no long-stay product.
Instead, we now find that seasonal rentals reign, I have been in this business for more than 6 years and, as surprising as this may seem, we have already seen it. In September 2020 the Generalitat already applied this index and it was overturned by the Constitutional Court in March 2022. A couple of years later we are back to business as usual.
This is not the first time that we have encountered a regulation in the prices of long term rentals in Catalonia.
On that occasion the shot backfired, the long-stay market was left almost without apartments, many remained empty, others were sold and a large part of them went to seasonal rentals. By that time I had been managing a large portfolio of seasonal apartments for about 3 years and I was transferred to another one to make it grow and keep it under control (I was a little out of control because of everything that happened during the pandemic). In short, in about a year since I started managing it, about 80-90 new apartments arrived in my portfolio alone.
I learned to manage large volumes, same work, but more floors, I had to automate processes and reduce times as much as possible, to continue providing a good service. This was achieved. The pandemic also blessed us with teleworking: much more clients interested in furnished apartments with internet, perfect to live and work there, also renting online and without visit; I land and I have a house. High salaries from abroad enjoying the climate and low local costs compared to their income.
Telework and partly the war in Ukraine ate up all the supply brought by the price regulation at the beginning of the decade, the occupancy rates were high and so were the prices, however, it seems that with this new wave of supply in season we will have more problems, the demand will grow, but nothing seems to indicate that it will do it at the rate at which the supply will do it (unless Putin decides to invade another country in the east).
In short, in the current situation, we must avoid misleading owners and explain to them that it is likely that their apartment in season will not be rented for what they have been renting recently. The current demand is quite well covered with what the city has to offer for that type of client. We should be concerned about customers looking for longer rentals, I understand that landlords don't want to gamble with long-stay contracts, with regulated prices and abusive protection for tenants.
There is a belief that contracts are always for a maximum of 11 months; this is simply a commercial tool.
From Beyondflats.com we want to offer the possibility of closing longer seasonal contracts, something that is not seen in other agencies and that is perfectly legal, it has been created the belief that seasonal contracts longer than 11 months are not legal or are directly of long stay, but it is nothing more than a myth.
Most of the masters and vital projects usually last more than 11 months, directly the average duration of masters and postgraduate degrees in Barcelona is 1 to 2 years. That is why we at Beyondflats.com believe that owners should also be aware of this and the advantages it entails. Consequently, they can open up to a huge range of clients if they decide to publish their apartment with us, which will allow them to have seasonal contracts with very high occupancy rates, less wear and tear on the apartments as there is more stability with the contracts and lower costs. Our model allows us not to charge as much administration commission as others, since we will have less rotation and commercial efforts during the year.
To conclude, the most logical solution to the current housing problem is not to act as if all seasonal contracts had to be for 11 months; firstly because it is not true, secondly because we increase costs for both tenants and owners and, finally, because the market is crying out for this solution.
Alex Eguiguren Barrado
