The Covid has meant the greatest loss of the last quarter of a century for landlords of real estate in Spain. Last year they together lost 2.4 billion euros compared to 2019, to global revenues of 21.76 billion euros compared to 24.158 million in the previous fiscal year. This means that the income obtained from real estate rentals fell by almost 10% (9.91%) last year, an unknown figure in the registry of the State Tax Administration Agency (AEAT).

The first quarter of this year (latest data available) repeats the trend, since between January and March the joint income of rental properties in the Treasury base was 5,416 million euros , which implies a decrease of 8.4% in relation to the first quarter of last year . However, the comparison is distorted, since the whole of the first quarter of last year was only affected by the pandemic the last fortnight of March when the lockdown was implemented. In fact, revenue grew in the first quarter of 2020 by 2.4%.

2.13% and 1.24% falls
In the data published by the Ministry of Finance, the global income obtained by real estate throughout Spain (a base that later serves to pay personal income tax for said income) has only decreased in annual terms since 1995 in three years: last 2020 and the 2012 and 2013 affected by the financial crisis. However, if last year there was a 10% collapse in income from property rental, in those years the fall was much smoother, 2.13% in 2013 and 1.24% the previous year .

Shelling by quarters, the first of last year still registered an increase of 2.4%, according to data managed by the AEAT. However, despite the fact that the effect of the covid was limited to fifteen days, it was noticeable in the growth rate, lower than that of the first quarter of 2019, 5.75%, and that of 2018, when revenues increased by 9.25% in year-on-year terms.

The second quarter of last year concentrated the main loss, with a decrease of 23.22%, with earnings for lessors of 4,568 million euros , far from the 5,910 million in the second quarter of 2019. The third quarter of last year was It stood at 5,516 million, a fall of 9.15% over the same period of 2019, and in the fourth quarter rents fell by 9.35%. In the first quarter of this year, despite a drop of 8.44%, there is a certain relaxation compared to the drops of the two previous quarters.

To assess the effect of the COVID on the property rental sector, we will have to wait and see how the data on income from property rental behaves, since it is foreseeable that the second quarter of 2021 will register an increase given the sharp fall in the last year in that period. In addition, it is necessary to count on the tourist rental leases that occurred in May and, especially, in June.

Premises and homes
Rents suffered last year, especially in the commercial premises segment, as many businesses remained closed and there was frequent negotiation between landlords and tenants to reduce, and even freeze, the payment of rent. In fact, the central government and many regional governments established support and measures to help businesses cover fixed costs, including rents.

But there was also a decline in the housing segment, as nearly a million workers (mostly temporary) lost their jobs in the second quarter and many other workers in Erte (up to 3.5 million) suffered a decrease in the 30% of your income, making it difficult to pay the rent.

Finally, the tourist rental segment suffered a very strong impact due to the virtual disappearance of tourism, to a greater extent international, during the last three quarters of the year.

By Rak Esh

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