Room rental prices soar in Alicante: surging costs and shifting trend

As rental prices for entire homes in Alicante continue to climb, renting a single room is becoming increasingly challenging and expensive.

According to a report by the real estate portal Idealista, the cost of renting a room in Alicante has surged by 16 per cent over the past year, with the average price now around €360 per month.

This rise comes despite a doubling of available rooms since June 2023, a trend that experts attribute to landlords shifting from renting entire apartments to renting individual rooms due to legal uncertainties.

Increase Across Cities

The Idealista study indicates that room rental prices have increased across major Spanish cities.

The most significant price hike occurred in Cáceres, with a 27 per cent increase, followed by Badajoz, Ceuta, and Palma, each experiencing a 25 per cent rise.

Among larger markets, Alicante led the surge with a 16 per cent increase, followed by Barcelona at 13 per cent, Madrid at 10 per cent, Valencia at 8 per cent, San Sebastián at 7 per cent, and both Málaga and Bilbao at 5 per cent.

Barcelona is now the most expensive city in Spain for room rentals, with an average monthly cost of €565. Palma and Madrid follow closely at €500, while San Sebastián averages €450.

In cities like Pamplona, Málaga, Santa Cruz de Tenerife, and Bilbao, the average price is €400, with Valencia at €395 and Alicante at €360.

Opposite End of the Spectrum

On the opposite end of the spectrum, Jaén and Palencia are the cheapest cities for renting a room, with average prices of €210 and €211, respectively.

Zamora and Ciudad Real are next, each averaging €220 per month.

Supply Dynamics

This rise in prices is occurring alongside a significant increase in the supply of rental rooms, particularly in Alicante, where availability has jumped by 108 per cent.

While this might seem contradictory, the increase in demand explains the simultaneous rise in supply.

Shift in Rental Model

Juan Carlos Soldado, the founder of Muppy, a national platform for temporary accommodation, attributes this surge in supply to a shift in the rental model.

Many landlords now prefer renting out individual rooms rather than entire apartments due to legal uncertainties and the potential for higher profits.

Recent laws have made renting out entire homes less attractive while renting rooms separately reduces the risk of non-payment, leading to a growing supply of room rentals.

Stable Rates

Regarding prices, Soldado notes that his platform has seen relatively stable rates, but the overall increase in average prices is driven by rising demand, as renting a room remains a more affordable option compared to renting an entire home.

Entire Home Rentals

A report by the real estate portal Fotocasa highlights that rental prices for entire homes in Alicante have seen a year-on-year increase of 7.1 per cent, with current prices averaging €11.34 per square metre per month.

In Alicante city, the increase is 4.2 per cent, bringing the average price to €13.23 per square metre.

Municipalities with the most significant increases include San Vicente del Raspeig, where prices jumped by 19.6 per cent to €10.14 per square metre, Alcoy with an 18.2 per cent rise to €6.96, Torrevieja with a 13.9 per cent increase to €12.22, and El Campello with a 10.9 per cent increase to €13.97.

Shrinking Supply

Soldado attributes the relentless rise in entire home rental prices to a shrinking supply, driven by the pressures of residential tourism and an influx of foreign residents.