For an average home with a price of 178,395 euros and an average monthly rent of 958 euros, an owner saw a return of 11,496 euros gross per year, a gross return of 6.44%. During the first quarter of the year, there was an increase of more than six tenths compared to the same quarter of 2020 (5.78%) and five hundredths compared to the last quarter of 2020 (6.39%).
Ferran Font, Director of Studies at pisos.com said “The real estate sector is consolidating in this crisis as a safe haven for investors, especially in large cities, where purchase prices are stabilizing and the rental market is highly dynamic. The third wave of COVID-19 has not prevented the real estate sector from continuing to show great strength and security for investors. The profitability that real estate assets have been registering since the beginning of the pandemic is notably higher and stable than that of many other assets,”
Returns by Autonomous Community
The ranking of gross profitability of rental property in Spain draws a range that goes from a profitability of 7.18% registered in Catalonia to 3.52% in the Balearic Islands. In the analysis by autonomous communities, the competitive prices for the purchase of residences in autonomous regions such as Aragón, Castillay León, Castilla-La Mancha or Murcia place them together with Catalonia and Madrid at the top of a list. At the other end of the list for investment returns on rental property in Spain are Galicia, La Riojay and the Balearic Islands, the latter due to the high purchase price of the properties and their high surface area. Andalucia listed in 10th position with average annual returns of 6.10%
The prominence of Catalonia and Madrid continues to confirm the correction of purchase prices registered since the beginning of 2020 in both territories and the stable behaviour of rental demand, making them the two most interesting locations for rental property investment.
If the analysis is extended to the average rental profitability registered in the 20 main Spanish capitals, Murcia once again shows as the most profitable with 6.44%. Zaragoza (6.08%), Seville (6.01%), Las Palmas (5.70%) and Oviedo (5.58%) are not far behind.
The ranking is closed by the cities of Bilbao (4.16%), Palma (4.02%) and Donostia-San Sebastián (3.55%), the latter for being the most expensive town in Spain for the purchase of a residential property. Madrid and Barcelona occupy the ninth and twelfth places, respectively, with a profitability of around 5%, a figure below the national average but which is offset by the high demand for the rental of housing that both localities register and, consequently, the lower risk that the investor runs.