Real estate investment in Spain, in any of the products analyzed by Idealista, offered at the end of 2016 rates of return higher than those recorded a year earlier. These yields multiply by four, in the worst case, those of the 10-year State Bonds (1.4%). The profitability of housing as an investment grows to 6.3% from 5.5% a year ago, due to the higher growth rate of rental prices compared to sales prices.
According to this study, which relates the sales and rental prices of different real estate products to calculate their gross profitability, the commercial premises remains the most profitable real estate investment. Buying a local in Spain to rent it offers a gross profitability of 8.5%, compared to the 7.3% they gave a year ago. Garages have increased to 6.1% (from 4.4% in 2015). By contrast, offices offer a yield of 7.6% (a year ago was 6.7%).
Profitability of housing
Among the Spanish capitals, Lleida and Las Palmas de Gran Canaria are the most profitable, with rates of 7.1%. They are followed by Huelva (6.7%), Malaga (6.3%) and Alicante (6.2%). The profitability in Barcelona is 5.5%, slightly lower than that of Madrid (5.9%).
However, the lowest yields in Spain are obtained by renting homeowners in Ourense (3.7%), A Coruña (3.9%) and San Sebastián (4.1%). Lugo (4.3%) is located next. In these cities renting a home would be more financially interesting than in those in which the profitability is higher.
Profitability of commercial premises
Locals are the product that has the most profitability in most capitals. The highest return is obtained in Malaga (11.1%), Alicante and Santa Cruz de Tenerife (9.4% in both cases). They are followed by Bilbao (9.1%). Barcelona has 8.6%, and Madrid has 7.5%.
Castellón offers the least attractive premises for the investor (only 4.7% profitability), followed by Almería (6.1%), Vitoria, Girona and Palma de Mallorca (6.3% in all three cases).
Profitability of offices
The offices of Cordoba have the most juicy return among the capitals, with a gross return of 7.9%. They are followed by Santa Cruz de Tenerife (7.1%) Almería (7.1%) and Zaragoza (7%). In Barcelona the profitability amounts to 6.5%, while in Madrid it drops to 6.3%.
On the opposite side we find the yields of A Coruña (4.6%), Valencia (4.9%), Santander, Bilbao and Oviedo (5.3% in all three cases). The office market is not as uniform as other products, so it is impossible to obtain statistical data of more than half of Spanish capital.
Profitability of garages
Garages are, on the other hand, the least profitable product for the investor in many capitals. The highest profitability is obtained in Las Palmas de Gran Canaria (8.6%), followed by Palma de Mallorca (6.7%), Almería (5.7%) and Malaga (5.4%). The municipalities with the least profitable garages are Salamanca, with 2.4%, Barcelona, with 2.7%, and Bilbao (3%). In Madrid the return is 3.4%.
Methodological note: For the preparation of this study, idealist has divided the average sale price offered between the rental price that the owners request in the different markets referring to the quarterly indexes of dwellings, premises, garages and offices corresponding to the fourth quarter of 2016.
Source: www.Idealista.com News Property analytics