Catalonia will also regulate the price of apartments with temporary contracts

In the current context of tension in the real estate market, Catalonia positions itself as one of the most proactive autonomous communities in housing price regulation. Following the amendments to the Urban Leasing Law (LAU) of 2023, the Catalan government has decided to implement new regulations that will affect not only long-term leases but also temporary ones. This article examines the implications this regulation will have on the rental market and the potential reactions of the various stakeholders involved.

The context of the rental market in Catalonia

The rental market in Catalonia has experienced steady growth in recent years, driven by an increase in housing demand, especially in metropolitan and tourist areas. However, this demand has far exceeded supply, creating a phenomenon of high price tension.

With the arrival of the pandemic, rental prices experienced variations; in some regions, they temporarily decreased, while in others they continued to rise. Despite this fluctuating situation, the long-term trend is clear: tenants face increasing difficulties in finding affordable housing. In this context, rent price regulation has become an urgent necessity for many.

Changes in legislation: What does the regulation of prices for temporary rental apartments imply?

The new regulation represents a significant change in how lease contracts are managed, incorporating specific measures for temporary rentals. These amendments seek to ensure that not only long-term contracts are protected against excessive price increases but that short-term tenants can also enjoy a fairer and more predictable framework.

Among the main stipulations of the new regulations are:

• Limitation of annual increases: Property owners will be subject to a limit on the yearly increase in rental prices for temporary contracts, similar to that already established for long-term contracts.
• Mandatory registration: All rental contracts, whether temporary or permanent, must be registered in a new control system, which will facilitate supervision by the authorities.
• Tenant protection: Clauses will be introduced to protect tenants' rights, preventing unjustified eviction situations and guaranteeing access to legal resources in case of disputes.

Implications in the rental market

The regulation of prices for temporary rentals will have several implications for the real estate market in Catalonia. Below, we analyze the most relevant:

1. Impact on the housing supply

With the new regulation in place, it is likely that property owners will be more reluctant to put their properties on the market for temporary rentals. The limitation on price increases could discourage investors who see this modality as a sustainable source of income. This could result in an overall reduction in the available supply.

2. Increase in demand for permanent rentals

Given that the regulation will also apply to permanent contracts, many short-term tenants are likely to opt for longer agreements in search of stability and better prices. This trend could lead to a significant increase in the demand for long-term lease contracts, which in turn could intensify the pressure on an already saturated regular housing market.

3. Legality and regulatory compliance

The establishment of a mandatory contract registry may represent a change in the market dynamics. Property owners will have the responsibility to ensure that their contracts comply with the regulations, while local authorities will need to conduct stricter supervision. This could result in increased administrative costs for both property owners and authorities.

4. Reaction of owners and investors

The community of property owners and investors will be attentive to the changes