According to statistics released by the Central Bank of Spain in January 2019, the return expected on the residential Real Estate market in Spain is 10,5% – Blue line on the chart.
This performance comes from two sources:
- gross rental yield estimated at 3,99% –Green line on the chart–and
- capital gain estimated at 6.51%.
- 5% is perhaps the most astounding rate since 2008!
- Mortgage rates are close to 2% and remain at the bottom of their 10-year range (2.34% in January 2019, Red line on the chart)
The first significant positive return since the crisis of 2008 came in early 2014 … four years ago…
As you can see on our chart, the estimated return became marginally positive for the second time since 2008 at the start of 2014. In 2010, the estimated return was positive albeit not enough to compensate for the costs of the mortgage. This time, the performance is much stronger as the estimated profitability of 11.2% covers by more than 5 times the costs of the mortgage.
- Real estate prices remain lower than the prices from 2008. Is there a lot of downside from here? Check the chart of real estate price evolution before and after 2007:
- Spain has the second weakest performance in Europe on a 10-year timeframe Have a look at the comparison of the real estate in Spain vs other European countries.
Spanish Real Estate is economic and has the highest yields vs top European Cities
Invest in property in Spain? Spain is in the hot spot for property investment!
Buy to let? Spain offers some of the best returns in Europe:
- Barcelona has the highest rental yield in Europe and Madrid and Valencia are fourth and fifth with the same yields as Rome and Amsterdam according to Deloitte.
Check the best rental Yields for the major European Cities, Madrid and Barcelona have rental yields close to 5%.