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Date Published: 04/07/2024

Unsellable and unrentable: Homeowners in Spain face a race to renovate with new EU rules

From 2030, property owners in Spain who want to sell or rent will have to comply with new energy efficiency measures

Spain's housing market is facing a challenge that has become all too familiar: a limited supply of affordable homes. This issue has led to a huge portion of the population struggling to secure adequate housing, whether for purchase or rent.

According to the Organisation of Consumers and Users, sales of homes took a downward turn in December 2023, falling by 15.6% compared to the previous year.

As of 2023, Spain boasted approximately 27 million residential properties, representing a 3.2% increase from 2022 and a continuation of a two-decade-long upward trend. Of these, more than 19.3 million were classified as homes, and this number is expected to rise further in the coming years.

However, a new complication looms on the horizon.

Starting in 2030, European regulations will require all homes sold or rented in Spain to obtain a minimum 'E' rating in terms of energy efficiency. This poses a significant challenge as, according to Andimac (the Association for the Professional Distribution of Construction and Rehabilitation Materials), a staggering 83% of Spanish homes do not currently meet this standard, instead falling into the 'F' or 'G' categories - the two lowest ratings.

With the minimum rating set to rise to 'D' just three years later, the race is on to meet standards, and many homeowners face the prospect of forking out for costly renovations if they wish to sell or rent their properties.

But rather than stem the rising prices of rent and property purchases in Spain, this situation is more likely to push costs up further as owners scrabble to recoup what they have been forced to spend.

According to the INE, the number of households in Spain is projected to increase by nearly four million in the next 15 years, with single-person households seeing the most significant growth at 41.9%.

This underscores the urgent need to address the housing market's challenges and find ways to increase supply while reducing prices – a solution that is desperately needed by so many individuals and families living in all parts of Spain.

Also of interest: Property price report from Spain—Are Spanish house prices going up or down?

Image: Archive

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