Amid an increasingly pressing housing crisis, the Build to Rent (BTR) model has emerged as a feasible solution to meet the growing rental demand in Spain. This approach, focusing on constructing residential complexes exclusively for rent, comes as an answer to the challenges both tenants and landlords currently face in the market.
The BTR concept has evolved in response to various social and economic changes that have restricted access to homeownership. The rise in prices and limitations on mortgage financing have led many to view renting as a more accessible alternative. According to Rafael Santana, the Director of the Madrid Office of K&N Elite, this model is expected to be positively received not only by domestic investors but also on an international level. Santana notes that Madrid is getting ready to compete with other major European cities in terms of the quality and appeal of its BTR projects.
The surge in this model is significantly growing. A study by Atlas Real Estate Analytics revealed that over 98,000 homes were planned under the BTR model in 2023, reflecting a 14.5% increase from the previous year. However, reality shows challenges in execution, as only 3,000 units were completed in 2022. This growth has been primarily concentrated in cities like Madrid and Barcelona, although other cities like Malaga and Valencia show promising signs of expansion.
The benefits of the BTR model are clear. Tenants have access to modern, efficient homes equipped with additional services such as gyms and green areas. Investors, on the other hand, gain stable income through rentals in high-demand areas, maintaining assets that appreciate over the long term, unlike the traditional buy-to-sell model.
Foreign investment has identified the Spanish real estate sector as an attractive area, partly due to its competitive return rates. Despite this, certain factors, such as the possibility of rent controls and tax regulations, could deter this investment due to the uncertainties they generate in the market.
Although the BTR model faces significant challenges, such as the increase in construction costs and the limited availability of urban land, it is poised to play a fundamental role in mitigating the housing crisis in Spain. Collaboration between the public and private sectors will be essential, as well as diversification into secondary cities to increase housing supply.
Rafael Santana concludes that the BTR model is not only a response to the current pressures of the rental market but also represents a structural change in the Spanish real estate sector. The key to the success and sustainability of this model will lie in the effective interaction between the public and private sectors, ensuring that housing solutions are offered that adapt to the current and future needs of the population.