Between March 2017 and March 2018, 8% of a representative sample of the Spanish population, surveyed by the property portal Fotocasa, declared that it had participated in the real estate market as an investment method. Of this 8%, 82% said they bought to later rent the house at some time after the purchase. The truth is that, if they rented their house last year in the province of Ciudad Real, the rent generated a gross return (ie before taxes and other costs) of 9.3%, the highest level of all the Spanish provinces, according to the Solvia real estate company.
In 2018, in%
It is true that there are neighborhoods or concrete areas of some large Spanish conurbations that exceed this level, but if the focus is on the provinces (and autonomous cities), Ciudad Real is at the peak of profitability. They are followed by Jaén (8.3%), Melilla (8.1%), Murcia and Lugo (7.7%), Toledo (7.4%), Cádiz (7.3%), Ávila and Zamora (7, 2%), and Badajoz (7.1%), as can be seen on the map.
The worst: Navarra and Gipuzkoa
If the Bank of Spain pointed out that putting a flat or a house for rent in Spain last year supposed to take advantage of a gross return of 4%, for urbanData Analytics - which performs periodically Residential market analysis for Appraisal Society- this figure rose to 8.12% in the fourth quarter of 2018. At 5.5% per year, Solvia is closer to the level indicated by the regulator. It is a weighted average, they explain from this signature of purchase and rental of housing, in which the smaller provinces or those in which fewer operations were carried out have a lower weight in the global calculation. The trend is a slight decrease compared to 2017, when profitability was at 5.7%.
VARIATION OF THE RENT IN 2018
In%, with respect to the previous year
Below the average of the Spanish provinces are Navarra and Gipuzkoa (4%), Bizkaia (4.2%), Álava (4.5%), Madrid (5.1%), Burgos and Zaragoza (5.2%) ), and Segovia (5.3%). Ciudad Real is also the province in which the profitability of rental has progressed more compared to 2017, registering an increase of 14.6%. They are followed by Melilla (8.9%), Huelva (8.7%), Cádiz (7.75%) and Almería (7.5%). On the contrary, the provinces in which profitability decreased more than 10% last year in relation to the previous year were Burgos (-17.7%), Huesca (-16.7%), Álava and León (-14) , 8%), Palencia (-14.1%), Lleida (-13.8%), Navarra (-13.7%), Zaragoza (-13.35%), Madrid (-12.85%), Bizkaia (-12.8%), Cáceres and Barcelona (-10.1%), always according to data from Solvia, which can be consulted in the graph.
Up to 12% in some neighborhoods
In any case, when considering only provincial capitals, the director of marketing and marketing of the company, Josep Manuel Ventosa, points out that Madrid and Barcelona are some of the cities with the highest income in Spain and with returns close to 6. % in both cases. But Within the cities themselves, different rates of evolution are perceived according to the area, with neighborhoods where 12% profitability has been achieved (such as Cerro Amate, in Seville, or Poblats Marítims, in Valencia) or 10% (Malvarrosa, in Valencia, Puente de Vallecas, in Madrid, or Polígono Norte, in Seville).
"In general terms, the most profitable areas are usually the suburbs of cities, since that is where the purchase price is usually lower than in more central areas, while rental income is within the average"Explains Ventosa.
To this powerful reason, the managing partner of the Barcelona real estate agency Fincas Blanco, Mercedes Blanco, adds another, that is, that the metropolitan area of large cities enjoy a constant demand throughout the year, which does not happen, for example , in beach locations. Taking as an example the Ciudad Condal, "the city with the most expensive rent in the country," Blanco points out that towns such as L'Hospitalet, Sant Boi, Cornellà de Llobregat, Esplugues, Sant Just Desvern or Badalona "register more competitive purchase prices. and leases with upward demand that yield very good returns for the individual investor. "
For the head of studies of Fotocasa, Beatriz Toribio, what is emerging is "a latent demand of people who during the last years have not been able to enter the market for several reasons". According to data from the real estate portal, "the rental price has not stopped rising since March 2015, and in 2017 there was the highest increase, 9%", Toribio emphasizes, although he adds that" 2018 closed with a rise of 1.8%, a much slower pace than the previous year ".
In an environment of very low interest rates, the comparison of rent with other types of investments is overwhelming in terms of gross profitability. "Real estate assets are one of the most profitable and secure investments at this time in Spain," says Blanco. As far as risk is concerned, however, Blanco warns that not everything is worth it. "The state of the property is fundamental," he admits. "The better the conditions, the greater the interest in renting the property, the greater the income to be received and the lower the unforeseen expenses, so that greater profitability will be obtained," he concludes.
The lower investment risk -calculated through the monitoring of supply and demand in the real estate market- was recorded in the last quarter of 2018 in the province of Granada, ahead of Valencia, Santa Cruz de Tenerife, and La Rioja , according to urbanData Analytics.