Spanish rental market showed signs of stabilization as the new Housing Lease Reference Index (IRAV), introduced by the Spanish Statistics Institute (INE), took effect. The IRAV, implemented since January 1, 2025, set the rental update limit at 2.2% for January 2025 based on November 2024 data, with the June 2025 index recorded at 2.1%. This adjustment applies to rental contracts signed after May 25, 2023, under the Housing Law, aiming to provide a consistent benchmark for rent updates. For example, a €1,200 monthly rent signed in June 2024 would increase by €25.20 to €1,225.20 in June 2025, using the June IRAV of 2.1%. The INE publishes the index monthly, with the latest data released mid-month, reflecting the previous month’s value. Earlier caps had limited rent increases to 2% in 2022-2023 and 3% in 2024 due to inflation pressures, but the IRAV now replaces the Consumer Price Index (CPI) for these contracts. Nationally, rental prices vary, with Málaga averaging €15.1 per square meter in 2024, up 11.4% from 2023, while Valencia saw a 12.2% rise to €14.9 per square meter. The new index aims to prevent disproportionate increases, with the June 2025 CPI at 2.3%, slightly above the IRAV. Market activity is expected to slow in August due to summer holidays, resuming in September with initial harvest insights influencing supply. The government continues to monitor 26.9 million housing units, with Andalusia holding a 17.2% share.
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