Tenants who were due for the annual review of their rental leases last month will see their monthly rent increase by an average of 51 euros from now on, according to a study carried out by idealista.
This is due to the record 7.4% year-on-year rise in the CPI, consumer price index, in February, according to the National Statistics Institute. The average price in Spain for renting a two-bedroom flat will rise to 746 euros per month, which is 617 euros more per year.
Tenants in San Sebastian and Barcelona will see average rents rise by 755 euros more per year, Madrid 728 euros, and Bilbao 710 euros, the highest rent increases in Spain.
In the Balearics, the average increase will be 56 euros.
The National Statistics Institute has published the advance data from the Consumer Price Index (CPI) for February, which rose 7.4% year on year, 1.3percentage points more than the final figure for January and its highest rate in the last 33 years. The rise in inflation directly affects housing rental contracts linked to the CPI.
Tenants who were due for their annual review in February will see their rents increase by an average of around 51 euros per month over the next year, according to a study by idealista, taking a two-bedroom flat in the provinces and larger cities as its reference data point for analysis.
The average price in Spain for a rental property of this type closed at 695 euros per month in February 2021, so the rent increase with the latest CPI now stands at 746 euros per month, which means an average increase in rent of around 617 euros per year.
The acceleration in inflation was driven by food, beverages, fuel and energy. Underlying inflation, which strips out those elements, rose 3% in February from a year ago, the highest since 2008. “The latest figures suggest that the inflation pick-up, which originated in the energy sector, is gradually spreading through the entire economy,” said Raymond Torres, head of macroeconomic analysis at Funcas think tank in Madrid.
He projects the war in Ukraine will add one percentage point of inflation this year.
Soaring gas prices were initially behind the inflation spike in one of Europe’s most vulnerable countries to international energy swings as it imports most of fuel needs from abroad.
Spain’s Ecological Transition Minister Teresa Ribera, responsible for energy policy, said last week the government will maintain tax breaks to help households as long as energy prices remain high.
The Spanish government has so far forfeited over 7 billion euros in tax revenue. Ribera and Economy Minister Nadia Calvino have proposed the EU take measures to decouple natural gas from electricity costs in its price-setting mechanism. Calvino said European authorities are warming up to their proposal to prevent Russia’s invasion of Ukraine from pushing record electricity costs even higher.