The case of the Escaldes-Engordany buildingrecently sold with all apartments rented and now in the process of being sold unit by unit, is, according to the sector, no exception. From the Association of Real Estate Agents and Managers (AGIA), the president, Jordi Ribó, interprets operations like this as the reflection of a fundamental change in the market: More and more landlords are opting out of renting and moving their assets up for sale after years of limited profitability. “The market is evolving towards this”points out, with reference to a dynamic that he attributes to the combination of frozen contracts for more than a decade and a sustained increase in costs associated with buildings -maintenance, reforms and services.
The current context of demand opens a more profitable way in buying and selling
according to Ribó, this mismatch between income and expenses has been progressively eroding the interest in maintaining certain properties under leaseespecially the older ones, where the maintenance and renovation needs are higher. In parallel, the current context of demand in sales opens up a more profitable way out. This is encouraging a change in strategy: buildings that had traditionally been fully exploited as rental stock are now in the hands of a single buyer with the aim of breaking up the unit and marketing the flats individually. That is, they are not kept as blocks intended for rent, but are transformed into a product for fragmented salean operation that maximizes the return, but that de facto reduces the supply available to tenants. This reading, however, contrasts with what the tenants of the Escaldes building live, which they report a lack of information and face the future with uncertainty at the possibility of losing their home. From the real estate sector it is admitted that the exit of these flats reduces the options available and keeps the pressure on a market already strained by the shortage of supply. However, the legislation establishes a series of guarantees that give residents room. The new owner he is obliged to respect the contracts in force and to grant a period of time before recovering the house. In cases where the contract expires within this period, it must be renewed automatically, fact that it can allow tenants to buy time and avoid an immediate exit, while not altering the underlying trend.
In total, there would be eight entire buildings currently for sale in the country
The background is how repeatable these types of operations are. As he has been able to find out Daily, between Escaldes-Engordany and Andorra la Vella there are two similar casesand in total there would be eight entire buildings currently for sale. From the sector admit that, if the current balance between rising costs and limited incomes is maintainedthese kinds of movements can go further, and call for a better public-private understanding to deal with the situation. For now, it remains to be seen these properties will remain as a rental park or if they will follow the path of the case of Escaldes, with the sale of the flats individually.
