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2024. Increase of property rental profitability in Spain?

Increased profitability in rental of Spanish residential properties (apartments, villas, etc)

During these last  months, we have witnessed an increase in housing prices, derived from the lack of supply in the market, as well as inflation that has set the economic pace in recent times.

Given this panorama, it is increasingly difficult for Spanish citizens to access a new home, or to own it, which is why they are forced to obtain accommodation through rent. This is why we have assisted to a reduction in the rental offer, resulting in an increase of rental prices, causing an increase in them, as well as their yields.

The average in Spain

Some data, at the end of the third quarter, indicated that the average rental profitability was close to 7% . We found areas such as Castilla-La Mancha, Extremadura, and Murcia, which bordered on and slightly exceeded the profitability of 7%.

However, at the end of the quarter, we find that this 7% barrier has been widely surpassed in different areas of Spain, such as Lleida, with 8.5%, Murcia, with 7.9%, Huelva with 7 .3%, Jaén with 7.2%, and Segovia with 7.1%.

Next, are Castellón de la Plana and Valencia, which reach 7%.

Below 7% we immediately find Almería with 6.9%, Alicante with 6.8%, Ávila with 6.6%, Zamora 6.6%, and Toledo, 6.6%.

The capitals with the lowest rental profitability are Pamplona, Cádiz, Palma de Mallorca, and La Coruña, all of them slightly above 4.5%.

Large capitals such as Madrid and Barcelona have profitability of 5.2 and 5.9%, respectively. This low profitability is due to the high prices reached in both capitals, although they are considered very safe locations due to the wide and abundant supply that occurs in these areas.

The offices, the most profitable

Depending on the areas, we find returns of over 10%, and in Barcelona and Madrid around 7,5 and 8%.

Commercial properties 

If we focus on commercial premises, profitability greatly exceeds 10%, both in Murcia, Santa Cruz de Tenerife, and Bilbao, while in Barcelona and Madrid it is slightly above 8%.

Source: El Economista 

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