Resale Property Prices Increased in Q1

Spanish property market recovering
The Spanish property market is recovering

Property portal Fotocasa have released their Q1 report on second-hand (resale) property prices in Spain. The data shows a slight increase in prices of 0.5% over the first quarter of 2016 meaning a square metre will cost an average of 1,627 Euros. According to the report this is the first quarterly increase in prices since 2007.

The data released by Fotocasa suggests this is the third consecutive quarter of growth following Q3 and Q4 of 2015 which recorded increases of 1.1% and 0.7%, respectively.

Beatriz Toribio, from Fotocasa Studies, said: “The price of housing is stabilizing after eight years in the red. In 2015 we saw how the fall abruptly slowed and how some areas closed the year with price increases. After losing 45.5% of its value, we hope that in 2016 housing prices have bottomed out across much of the country and will begin to recover in the major economic and population centres,”

According to the report, the inter-annual rate showed an increase of 0.6%, the first increase in year-on-year prices recorded since 2007.

Q1 by Region

When comparing to December 2015, eight of the country’s autonomous communities recorded a positive change with the Canary Islands registering the highest increase of 6.3%. The Balearic Islands followed with a 2.2% increase. Valencia and Andalucia registered increases of 2.2% and 1.4% respectively, while Madrid showed an increase of 1%, with Catalonia closing the quarter with a 0.9% rise in property prices.

When we look at the average price per square metre, the Basque Country topped the table with 2,736 Euros per m². Second and third positions were taken by Madrid and Catalonia with €2,225 and €2,064 p/m².

The cheapest region was Castilla-La Mancha where the same space will cost you €1,050. The next two cheapest regions were Extremadura (€1,088 p/m²) and Murcia (€1,143 p/m²).

By Province

Thirty of the country’s provinces showed an increase in prices with the largest recorded rise being in Santa Cruz de Tenerife where prices increased 2.9%. Las Palmas was next with a 2.4% increase.

Of the 779 municipalities looked at by the study, 459 recorded prices increase, while 320 showed a decline in property prices.

NB: I must point out that this is data based on the prices of the properties Fotocasa, a property portal, have for sale on their site. Another property portal, Idealista, also release data based on their listings and that is why, in case any of you noticed, a previous article based on Idealista data, suggested prices had actually fallen in Q1. As with everything, it depends who you ask! If I report on both studies you can get a better idea of what the actual figures are.

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Average House Prices Increased in Q1

Property prices saw encouraging growth in Q1
Property prices saw encouraging growth in Q1

According to data released by Tinsa, average house prices in Spain increased by 1.4% during the first quarter of 2016, when compared to the same period in the previous year. This is the second consecutive quarter to finish with an increase, and comes despite the fall in prices for resale property.

As far as regions go, the two clear winner were Catalonia and Madrid who saw year-on-year increases of 8.2% and 7% respectively.

For the first time since the crisis of 2007, more autonomous regions recorded an increase in prices than a fall. Following the aforementioned “winners” other regions that saw significant price appreciation were the Balearic Islands with a 3.8% increase, Castilla La Mancha which saw a 3.5% increase and also the Canary Islands where property prices increased 2.4%.

Only two regions recorded a price fall – Aragon and Galicia – where prices fell by 3.5% and 3.1% respectively. When looking at how prices have or have not recovered since the crisis, property in Aragon is now 51.3% lower than in the peak of 2007. Castilla La Mancha has seen prices fall 51.2%. The smallest shift in prices is recorded in the Balearic Islands where prices are currently 28.9% lower than pre-crisis levels.

Provinces

By province, the largest quarterly increase was recorded in Barcelona where prices increased 8.9%, followed by Albacete (+7.6%), Madrid (+7%) and Lleida with a 6.5% increase. A further 12 provinces managed increases above the national average of 1.4%. The recovery seems to be continuing and also spreading out across the country.

The provinces that registered the largest quarterly fall were Álava, Teruel and Jaen, with decreases of 7.8%, 6.7% and 6.3%, respectively. Cordoba, Pontevedra, Palencia, Burgos and Zaragoza also saw prices depreciate by more than 3%.

When comparing the provinces to pre-crisis levels, the largest adjustment is in Toledo which has seen depreciation of 55.1% since 2007. Zaragoza and Guadalajara also saw falls of over 50% registering cumulative declines of 54.3% and 54.1%.

Selling

When selling a property in Spain, the average time required from putting the property on the market to closing a sale is currently 10.5 months. However, in Cantabria the average time required is 19 months, while sellers in Avila require an average of 17.1 months to close a sale. At the other end of the table Ceuta, Melilla, and the provinces of Las Palmas and Madrid have average selling times below seven months.

As previously mentioned, Barcelona and Madrid have seen increases in value and the demand for property in those areas is also reflected in the time required to sell. In both cities the average time required to sell is less than six months (5.9 in Barcelona and 5.6 in Madrid). In the city of Valencia, the trend is reversed with the average time to sell being over a year, standing at 13.2 months.

Personal Situation

As the rate of decline in property values has been more pronounced than the reductions in wages and the cost of living, the requirement to purchase a property (to afford mortgage payments) during 2015 was 22% of household income, compared to the 33% that was required in 2007. Only Malaga exceeded this average. Buyers in the Andalusian province will require 33% of gross household income to purchase a property.

In both Zaragoza and Valencia, the requirements are well below the national average with 19% and 17% respectively.

The requirement in Barcelona is 23.3%, while Madrileños require 21.5% and those in Seville will need 20.5% of household income. The area with the highest requirements is the district of Sarria-Sant Gervasi (Barcelona), where buyers will need 39.9% of household income to pay a mortgage.

When looking at the requirements in terms of yearly salaries, the current requirement is 6 years’ salary, compared to 8.1 years during the boom years. In Malaga, however, eight years’ salary would be required, while buyers hoping to purchase on the Balearic Islands will have to fork out an average of 14 years’ salary. This is mainly due to the busy residential market on the islands aimed primarily at foreign buyers.

You can see the full report here (in Spanish).

 

Licences for Housing Increased in January

The once familiar cranes are returning to Spain
The once familiar cranes are returning to Spain

As I’ve been saying lately, the Spanish property market is recovering well from the tumultuous few years following the crisis and the number of building licences issued in January this year appears to back me up.

January saw an increase of 39.7%, when compared to January 2015, in the number of building licences issued with 4,774 authorised new constructions, according to data released by the Ministry of Public Works.

47.8% More Apartments

Of the total, 3,572 licences were issued for apartments within a block representing an increase of 47.8% over the same period last year. Licences for single-family homes increased by 20.3% with 1,201 new properties given the go-ahead.

This continues the upward trend that began in 2014, a year which saw the first positive signs following seven years of negativity, and culminating in 2015 with the number of licences up to 38,873, an increase of 1,.7%.

The Spanish property market suffered terribly after the 2007 crisis with 2013 marking a record-low in the number of construction licences approved, down to 34,288 units. This was less than a tenth of the 2006 peak of 865,561 licences, a collapse of 96%.

 

More Mortgages Written in January

Despite the number of property sales falling slightly at the start of the year, when compared to last year, the number of new mortgages written in Spain increased in January by over 10% with 23,275 new mortgages recorded.

Also on the increase is the average amount of the mortgages written which increased by 14.2% compared to January 2015, to stand at 133,461 Euros.

The total value of mortgages written on urban properties amounted to 4,229.4 million Euros, representing a 16.3% increase over the previous year. Of those, the amount borrowed against residential property increased by 10.8% to 2,459.7 million Euros. Mortgages on residential properties accounted for 55.3% of capital borrowed in January.

Interest Rates

The majority of new mortgages written in January (89.8%) were variable rate mortgages, compared to only 10.2% on a fixed rate. In 94% of cases interest was based on the Euribor rate which has been consistently low in recent months.

The average rate of interest applied to new mortgages in January was 3.21% with the average term being 22 years. On residential property the average rate was 3.27%, representing a slight fall of 0.4% compared to January 2015.

By Community

Andalucia, Madrid and Catalonia registered the highest amount of new mortgages with 4,684, 3,976 and 3,857 new mortgages, respectively.

By growth, the winning communities were Castilla-La-Mancha which saw a 30.4% increase, followed by Madrid with 22.9% more mortgages and Andalucia with 22.2% more than in January last year.

When comparing communities based on the total amount of borrowed capital Madrid easily dominates with 576.9 million euros lent out during January. Catalonia followed with 457.2 million and Andalucia with 411.8 million Euros.

The largest monthly variation recorded, when compared to the previous month (Dec 2015), was Castilla y León which saw an increase of 53%, while the number of mortgages written in Castilla-La Mancha increased 43.6%.

The only two communities that recorded a fall in the number of mortgages written were Cantabria (-10.9%) and Galicia (-8.0%).

Read the full report here: INE (in Spanish).

 

Spain Ranks Third For Investment in Europe

Madrid remains popular amongst investors
Madrid remains popular amongst investors

Further to my previous article regarding foreign investment in Spain, research released by the CBRE has placed Spain as the third choice for European investment in real-estate.

According to the ‘Global Investors Intentions Survey 2016’, 10.2% of respondents suggested that Spain would be their third choice for European investment during 2016. Only Germany and the UK came ahead with 17% and 15.1% respectively, beating other once popular European countries like France and the Netherlands.

When looking at cities within Europe, Madrid maintained its position as the second most attractive city on the continent for real-estate investment, chosen by 12.2% of respondents, just behind London, but ahead of Paris, Berlin and Warsaw.

Diversification is the word of 2016 according to the report with more cities getting a mention than in similar research conducted in previous years. The top 15 saw first time entries for cities including Budapest, Prague and Bucharest.

Product Choice

While 30% of investors specified the housing market as their first product choice, other markets have also made gains with student residences, health centres and leisure facilities all being noted as worthy of investment this year.

The retail sector also appears to be making a recovery thanks to rising consumer confidence and increased consumption. The sector accounted for 22% of investment in 2015 with a predicted rise to 27% in 2016.

Despite this, office property continues to hold high interest for investors with 37% of respondents stating they have or would invest in business premises.

Backing up thoughts that residential property is back on investors’ shopping lists is a 7% increase in residential investment making it the fastest growing sector with 12% of respondents putting their money into homes.

Of the respondents 82% stated that their investment activity during 2016 will be the same or greater than in the previous year.

Rest of the World

North America was the global first choice with 48% saying they had or would invest in the USA in 2016, while 26% named Europe as their first choice. Other once popular regions didn’t fare so well with Asia Pacific seeing reduced interest partly due to concerns about the China slowdown and a “murky outlook” for other emerging markets in the region.

Only 4% suggested Central and South America as their investment choice while 1% chose Africa for their money. Central & Eastern Europe also failed to make an impression attracting only 8% of the reports respondents.

 

Airports Record Increase in Passengers

Following a great start to 2016 for tourism, February showed a continuation of the trend.

During February Andalucian airports reported a total of 1,243,314 passengers spread over 14,760 flights. The total for the first two months of the year increased 16.2% over the same period in 2015, standing at 2,374,543 passengers.

Málaga

Málaga - Andalucía's busiest airport
Málaga – Andalucía’s busiest airport

According to data released by AENA (Spanish Airports and Air Navigation) the busiest airport in the region, over the first two months of 2016, was Málaga which saw 1,527,221 passengers. This represents a 15.7% increase over the same period last year.

Málaga passengers were spread over 12,646 registered flights, also the highest number for the region. This was an 11.9% increase over the previous year.

According to the report Málaga Airport “continues on the path of growth with which it closed 2015,” recording a huge rise of 17.8% more passengers and 14.5% more flights in February 2016, compared to the same month last year.

Other Regional Airports

The airport with the second highest number was Seville with only 599,541 passengers. This is also an increase over the previous year representing a rise of 15.5%. Seville also registered a 3.3% increase in flight numbers with 6,355 recorded operations.

Federico García Lorca (Granada-Jaén) saw a 12% increase with 107,734 passengers passing through, while Almeria recorded 78,484 passengers, a massive increase of 35.4%.

Jerez de la Frontera (Cádiz) saw 60,137 passengers pass through, representing an increase of 21.3%, while Cordoba was the only Andalucian airport to report a decline in passenger numbers of -3.4% to only 876 travellers.

Passengers

The majority of travellers were on commercial flights, accounting for 790,747 of the total. The majority of those travellers were on international flights, a 16.8% increase over 2015.

Internal flights (between Spanish airports) accounted for 146,834 passengers which shows good growth for the domestic market representing a 21.7% increase, while the number of flights also increased with a 17.9% gain.

In terms of passenger origin, the UK remained the largest source of tourism sending 226,819 travellers to Spain during February, an increase of 17%.

Second was the Germans with 68,753 passengers while the Netherlands accounted for 46,908 travellers.

 

Andalucia To Woo French Travellers

The Salon Mondial du Tourisme de ParisContinuing the push for tourists in Andalucia, the Ministry of Tourism and Sports is now on its way to the Porte de Versailles, in the French capital, to take part in the Salon Mondial du Tourisme.

Following a successful trade fair in Berlin with the aim of attracting more German travellers to the region, the Ministry has now turned its attention to the French.

There will be several displays under the section “Turespaña” which it is hoped will attract many potential travellers, as well as business contacts eager to trade in the Spanish region.

The Ministry will attend in order to showcase the attractions of Andalucia with the simple aim of increasing tourism from France, which is currently the second largest source of travellers to the region.

During 2015 Andalucian hotels recorded 803,040 travellers from France which was 11.2% more than in the previous year. Total overnight stays from French travellers recorded in 2015 increased by a huge 18.6% with over 2.4 million overnight stays recorded.

The Salon Mondial du Tourisme de Paris will run from March 17th – 20th and is considered to be one of the most important trade shows for reaching the French market. In 2015 the show received over 100,000 visitors and just short of 2,000 exhibitors.

 

Spanish Tourism Set For Another Great Year

Benidorm
Don’t expect legroom this summer!

Following yet another record breaking year for Spanish tourism, 2016 is likely to see even more tourists hitting the beaches.

In 2015 the wonders of Spain attracted a massive 54.4 million tourists to its shores. In September alone over 7 million visitors arrived, making it Spain’s busiest September on record.

Once again, the UK was the leading source sending over 12.5 million visitors our way between January and September, followed by France (9,183,150) and Germany (8,270,276) tourists.

Of course, with tourists comes spending and in 2015 this was another record figure. The total expenditure by non-resident tourists throughout 2015 stood at a massive 67,385 million Euros, representing a 6.8% increase over 2014. Most of that money came from British tourists. According to INE, those Brits everyone criticises spent a huge 14,057 million Euros in 2015. So I’m sure Spain can forgive a few unruly stag parties, unless they want to give up the largest part of their profits! This is a 10.3% increase over 2014 and this year is expected to host more visitors so who knows what figure I’ll be reporting this time next year.

German and French tourists came in second and third place with spending of 9,837 million from the Germans (a decrease of 1.9%) and 7,074 million Euros from the French (an increase of 7.9%).

This year has started well with 3.5 million international tourists visiting in January, representing an 11.2% increase on the same period in 2015. Following terrorist attacks and changes to Foreign Office travel advice, tourists are ignoring the usual haunts like Turkey, Tunisia and Egypt, instead opting for the “safer” Spain and Portugal. Hoteliers are recording massive increases in bookings for summer holidays and are urging people to book early to avoid disappointment.

Travel group ABTA have also noticed the increase in demand with Mark Tanzer, ABTA Chief Executive saying “The significant increase in summer holiday bookings to western Mediterranean destinations is also being mirrored in other Northern European markets. So it makes it more important than ever that customers book early to obtain the best value and ensure they get the holiday of their choice.”

Travel expert Bob Atkinson said Spain was currently the most searched destination on holiday comparison site TravelSupermarket.com.

Following January’s bomb blast in a busy tourist spot which resulted in ten deaths, Turkey has reported a 50% decrease in reservations.

Mark Warner Travel have cancelled their Turkish holiday programme in its entirety for 2016 stating “We have enjoyed a long and happy history of offering holidays to Turkey and hope to return in the future.”

Meanwhile, Turkish holiday specialists Elixir Holidays have announced they are struggling to compete and are facing administration.

Thomas Cook have also announced that 400,000 seats destined for Turkey have now been allocated to Spain. Thompson Holidays have also increased Spanish options to cope with the massive demand.

Budget airline Monarch, have made changes to their schedule diverting their eight weekly flights to Sharm-el-Sheikh to Spain following the ban on UK airlines flying to the resort which saw 38 people murdered in last year’s terror attack.

Property agency Marbella For Sale have seen an increase in enquiries for holiday rentals in Marbella and the playground to the rich and famous, Puerto Banus, with many of their properties already fully booked for the whole summer.

The increase is surely good news for Spanish businesses but not so great for the tourists as the demand has meant an increase in prices. Room rates are rising due to demand as are flights and car rental costs.

So what to do? If you are planning on spending your summer holidays in Spain, then I suggest you start looking into it now. But shop around, there are plenty of websites offering cheap flights and accommodation so check them all. Don’t book the first one you see and make sure you read the small print!

Does a Zero Rate Euribor Affect Your Mortgage?

What mortgage should I get with a negative Euribor?

The Euribor has reached zero and continues its downward path, an unusual scenario which causes troubles to banks in an inauspicious time for retail businesses. The variable rate mortgage, with a calculation formula stipulated by adding a spread to Euribor, will experience a surprise in the coming months: the applicable Euribor may have a minus sign in front of it.

What effect would this have on fees? A charge for being mortgaged, a reduction in the monthly payment or no effect at all? If the absolute value of Frozen Euribor overtakes the differential one, the applicable interest rate would be negative, implying getting money for having borrowed, according to the opinion of some. After all, there are banks that pay other financial entities to lend money, and this paradox makes the Euribor and other market interest rates very cold. But the banks have already made clear that to “pay for borrowing” is “contradictory” and that, in any case, the courts are the ones to decide.

Although it might happen that financial institutions have to pay the mortgagor, only a few customers could experience the happiness of actually receiving money. Customers who took Deutsche Bank mortgages, to a spread of 0.17%, or Bankinter, with its extinct Euribor offer of +0.18%, are the type of borrower who might experience the effect of negative rates. Those with ordinary mortgages may opt for a reduced share, with interest below the agreed differential. The effect would be invalid if the writing of a mortgage establishes a floor clause, which immunizes the monthly fee from negative rates. In these cases, consulting a lawyer to analyze if a lawsuit against the bank is viable is a good thing to do.

What if I’m thinking about asking for a mortgage?

The yield curve that benefits many mortgagors may hurt new applicants. 2016 is going to be the year of real estate, but it is going to takeoff gradually. Banks want to attract creditworthy customers and compete in the mortgage market, but this effect may be mitigated if the negative rates scenario continues.

In the first place, the reduction of spreads has stopped, according to data handled by the financial portal iAhorro.com, Euribor + 1 was the one to beat this year, but banks have frozen the lower rate offers. It is not plausible to see lower spread mortgages until the Euribor value rises again, even if only slightly. This is a bad panorama for those who had planned to finance their home when mortgages were cheaper.

In addition, to wait for a rebirth of floor clauses is not unreasonable. The floor clauses are not illegal; what does not comply with the rules is to hide its effects on the calculation of the monthly installments from clients. A “zero clause” agreement has been established which means that the mortgage interest will never descend below zero. It could be only a matter of time before some banks take the leap to provide limitations on the descent of moderate interest rates, not much above 1%.

Banco Santander has innovated and may set a trend: it states that the rate is fixed for the first two years, namely 1.75% nominal. Two years is not a term that seeks to benefit the customer who pays fixed fees, but to protect the bank from a negative Euribor during this time.

But not everything is bad news for those who want to get a mortgage this year: there are several banks offering mortgages with fixed or mixed stable rates below 3% or even 2% depending on the bank and the client. 1.75% for two years is a bad choice; but a safe 2% for ten or more years is an option to take into account. In the mortgage North Pole, those who know how to wrap up with the training and information coat, will arrive safely at their destination: just paying a fair amount for the money borrowed.

 

N.B. This article is for information only and should not be treated as financial advice.

New Decree Signals Change For Private Rentals

For the last three years, owners of holiday-let apartments have been holding their breath as the Junta de Andalucia attempt to come up with a new decree governing the renting of private apartments to holiday makers.

The decree was finalised and finally published late last week bringing the wait to an end.

Regulation of the industry on the Costa del Sol is lagging behind as other parts of Spain have had rules in place for many years, including Catalonia where the rules came into force in 2014.

You can read the official document in Spanish on the Junta de Andalucia website.

Does my property qualify as ‘holiday rental accommodation’?

If you own a private residential property in a residential zone and you regularly offer it for short-term (holiday) rentals for financial reward and you promote it via any recognised tourism channel then yes, this applies to you. Recognised tourism channels include, but are not limited to, travel agencies, third-party tourism promotors, or any channel that includes the option to make a reservation.

If any of the following applies to you then don’t worry, your property is excluded:

  • Properties that are transferred without payment or financial reward.
  • If the rental contract lasts for more than two months continuously by the same tenant (long-term rental).
  • Properties in rural areas. These properties are already covered by article 48 of Law 13/2011 of December 23rd and Decree number 20/2002, dated January 29th, Tourism in Rural Areas and Active Tourism.
  • Multiple properties (three or more) with the same owner, located in the same building, or in neighbouring buildings, less than 1km from each other. These will be classed as Touristic Apartments and will be subject to Decree 194/2010 of April 20.

Can I rent my property for tourism purposes?

If renting the entire property, the maximum capacity is restricted only by the license of occupation but may not exceed 15 people with a maximum of four people per room.

If renting a single room, the owner must also reside in the property, and the maximum capacity will also be four people per room, with a maximum of six people.

My property qualifies and I do rent it our seasonally. What do I need to do?

This is quite a list so sit comfortably and read on!

  1. An occupational license is required and your property must comply with technical conditions and quality requirements for housing.
  2. The property must be sufficiently equipped and furnished to enable immediate use.
  3. Ventilation, either via direct ventilation or via a patio must be in place as must the ability to provide window shading either by darkened windows, blinds or curtains.
  4. Fitted air-conditioning must be in place in all bedrooms and lounge areas. For rentals from May to September a cooling system must be available. For rentals from October to April a heating system must be available. If your property is listed as of “cultural interest” or building/modification work is prohibited, then your property is exempt from this item.
  5. Properties must contain a fully stocked medical/first aid kit.
  6. Information about local amenities must be made available for tenants. These should include details of local shops, restaurants, parking, medical facilities and public transport, etc.
  7. A complaints/claims book must be made available to tenants.
  8. Properties must be cleaned before check-in and after check out of clients.
  9. Bedding, towels and other household good must be provided, along with spares.
  10. A contact number should be available for tenants to answer questions or resolve issues regarding the rental.
  11. Information/instructions must be provided for all electrical appliances.
  12. Rules and regulations regarding the property and/or the urbanisation must be provided. These include rules regarding smoking, music, pool access etc.

 Ok, I’ve got that. How do I register?

As the owner of the property it is your responsibility to ensure your property is in-line with the new requirements and is registered with the authorities.

To do this you must submit a statement to the Ministry for Tourism confirming the property is compliant. Once submitted you can accept clients immediately. The minimum details you are required to submit are:

  • Property Details: Catastral Number and Maximum capacity (as stated on the license of occupation)
  • Your details: Whether you are an Individual or a Company, along with contact information.

Once you have registered you will receive a registration number which must be included on all promotional/advertising material.

The registry must then be informed of all rental activity in your property. This includes details of commencement and cessation of rentals.

How do I go about my rental business now?

There is now a long list of things you now have to do to legally handle your rental clients:

  1. All of your clients must be presented with a document, by way of contract, that provides your details, the registration number provided by the Registry of Tourism, the tenants details along with the details of their stay, including the price, and a contact number.
  2. All of your tenants must provide you with identification to enable you to register details of their stay. This brings private rentals in-line with the registry process when staying in any other recognised hotel or similar.
  3. You must agree arrival and departure times with your tenants prior to their arrival. If you do not, the arrival time will be assumed to be 16:00 and departure time will be 12:00.
  4. At the point of check-in, the clients must be provided with keys or access cards to allow them entry to all points of the property/urbanisation. You should also provide details of any rules regarding the community/urbanisation.
  5. Instructions for all the appliances within the property must also be made available.
  6. When advertising your property, it must be priced per night and the price must include utilities (water, electricity, cleaning and bedding). There is no restriction on the number of nights.
  7. Final price, dates etc must be provided in writing before confirmation of any booking. If an advance payment is made, a written receipt must be provided for the tenant.
  8. You may request an advance payment as a deposit up to a maximum of 30% of the total rental cost, unless a different amount is previously agreed with the tenant.

Cancellation

  • If the tenant cancels the booking within 10 days of the commencement of the rental, then the owner may retain the deposit in full.
  • If the tenant cancels the booking more than 10 days before the commencement of the rental, then the owner may retain up to 50% of the deposit.
  • If the owner cancels the booking more than 10 days before the commencement of the rental the tenant must receive a refund of the entire deposit.
  • If the owner cancels the booking within 10 days before the commencement of the rental the tenant must compensate the tenant with up to 30% of the contracted price of the entire stay.

Force Majeure

If the rental is cancelled by either party for substantiated reason or force majeure, no compensation will be due to either side.

 Deadline and Sanctions

Don’t panic! The decree was only published last week so you have a little time to prepare. Registration will open three months from publication, which was Feb 11th. This takes us to May 11th, 2016. From this date we believe you will have three months in which to register your property. You then have 12 months to ensure your property is fully compliant.

If you rent out your property without registering or before your property is fully compliant then you are liable to be fined. Maximum fines are stated as 180,000€.