The measures announced for the future Housing Law ? reduction of rental income for large owners, generalized rent freeze and surcharge in the IBI for empty homes ?? They will slow down the good progress of the real estate market because they will introduce a serious distortion that will prevent precisely what it is trying to achieve: the most affordable access to housing.
The reason is that these measures will cause a reduction in supply , with the consequent effect of rising prices, and a brake on investment. For this reason, the Official College and Association of Real Estate Agencies and Agents of Madrid (COAPIMADRID ?? AIM), chaired by Jaime Cabrero García, calls for a calm processing of the future law and not precipitated by the current political context.
It is necessary to approach the new regulations with a broader perspective in which there is a common horizon of offering legal security in the market from an economic and professional approach, in favor of consumers, agreed with all representatives and professionals of the real estate sector.
At a time when, due to the market dynamics itself, rental prices are falling, a trend that began due to the pandemic, evidence that it is not appropriate to introduce a public price intervention. But it is even more misguided when it has already been observed how in a region, Catalonia, in which this measure of income regulation is being applied, what has happened is that it does not achieve the reduction in prices and causes the exit of real estate from the market. With the announced measures, rental income will go up.
On the other hand, it must be pointed out that the proposal to introduce tax incentives for owners to reduce the rent will not be really effective due to the low yield that can be obtained based on the income brackets, since the tax deduction would not compensate the loss suffered with lower rent.
In addition, although it is true that boosting the public rental stock is a good objective, it will not be achieved with the reserve of 30% for protected housing in housing developments, since it means introducing another obstacle to the functioning of the market, by curb investment.
If the announced measures are finally introduced into the text of the future Housing Law, the good performance of the real estate market observed in recent months, which has taken off despite Covid19, will be hampered by the introduction of this range of clearly interventionist measures , as it will also impact the housing transaction market.
It would be good not to lose sight of the need to address the future standard considering the sector as a whole: the activity of professionals, urban streamlining, legal certainty for operators and consumers in transactions and projects, as well as the real boost to social housing through European funds, all at a time when the real estate sector and the financial sector are in good harmony.
The announced measures break market unity, creating the possibility that there may be distortions caused by the possibility that they may be applied in some geographical areas and not in others, such as the tax increase in the IBI, or the intervention of rent prices itself. , which may be applied in some autonomies, but not in others.