Gross rental yields in Spain have returned to normal
Residential Valuation Specialist | August 14, 2018
|Last Updated: Aug. 14, 2018|
|BARCELONA - Ciutat Vella apartments||COST (€)||YIELD (p.a.)||PRICE/SQ.M. (€)|
|TO BUY||MONTHLY RENT||TO BUY||MONTHLY RENT|
|50 sq. m.||240,550||1,028||5.13%||4,811||20.55|
|120 sq. m.||597,360||1,991||4.00%||4,978||16.59|
|BARCELONA - Eixample apartments|
|50 sq. m.||284,550||1,092||4.61%||5,691||21.84|
|120 sq. m.||629,280||1,933||3.69%||5,244||16.11|
|BARCELONA - Gracia apartments|
|50 sq. m.||236,700||1,001||5.07%||4,734||20.02|
|120 sq. m.||518,640||1,729||4.00%||4,322||14.41|
|BARCELONA - Les Corts apartments|
|50 sq. m.||253,500||995||4.71%||5,070||19.89|
|120 sq. m.||534,360||1,858||4.17%||4,453||15.48|
|BARCELONA - Sarria-Sant Gervasi apartments|
|50 sq. m.||280,200||1,101||4.72%||5,604||22.02|
|120 sq. m.||718,680||2,357||3.94%||5,989||19.64|
|MADRID - Centro apartments|
|50 sq. m.||264,400||1,063||4.82%||5,288||21.26|
|120 sq. m.||627,960||2,057||3.93%||5,233||17.14|
|MADRID - Chamartin apartments|
|50 sq. m.||294,550||958||3.90%||5,891||19.16|
|120 sq. m.||574,680||1,958||4.09%||4,789||16.32|
|MADRID - Chamberi apartments|
|50 sq. m.||284,450||989||4.17%||5,689||19.77|
|120 sq. m.||650,520||2,094||3.86%||5,421||17.45|
|MADRID - Retiro apartments|
|50 sq. m.||286,350||1,062||4.45%||5,727||21.24|
|120 sq. m.||557,280||1,796||3.87%||4,644||14.97|
|MADRID - Salamanca apartments|
|50 sq. m.||312,500||1,115||4.28%||6,250||22.30|
|120 sq. m.||674,160||2,215||3.94%||5,618||18.46|
|MADRID SUBURBS - Las Rozas apartments|
|100 sq. m.||312,000||1,179||4.53%||3,120||11.79|
|MADRID SUBURBS - Majadahonda apartments|
|150 sq. m.||516,000||1,899||4.42%||3,440||12.66|
|MADRID SUBURBS - Pozuelo de Alarcon apartments|
|200 sq. m.||765,000||2,586||4.06%||3,825||12.93|
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule
Gross rental yields on apartments in Barcelona´s Ciutat Vella - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - range from 4.40% to 5.15%. Similar yields, or maybe slightly lower, can also be had in Madrid. Not great, though not untypical for cities like Madrid and Barcelona. Yields on the very smallest apartments now offer reasonable returns. But then smaller apartments tend to need more maintenance, so a higher yield is justified.
Prices of apartments. Prices per square metre (sq. m.) of apartments in Barcelona range from around EUR 4,500 to EUR 6,000, or around 225,000-300,000 euros for a 50 sq. m. apartment. In the heart of Madrid, i.e., Chamartín, Chamberí, Retiro and Salamanca, prices per sq. m. range from around EUR 4,300 to EUR 5,400, or around 220,000 to 250,000 euros. There´s very little price-difference between the two cities, and for all practical purposes costs are around the same.
In nearby upscale suburbs of Madrid such as Las Rozas, Majadahonda and Pozuelo de Alarcón, apartments are cheaper, with prices per sq. m. ranging from around EUR 2,800 to EUR 3,800.
Rents of apartments. Rents are similar in the two cities, maybe slightly lower in Madrid, so that 50 sq. m. apartments will cost around 900-1,000 euros per month, while 120 sq. m. apartments will cost around 1,700-2,100 euros a month.
Conclusion: All these yields figures are higher than last year, which was higher than the previous year. Spain is once again beginning to look a possible investment destination.
When buying property, take into consideration that round-trip transaction costs are moderate to high in Spain. See our Property transaction costs analysis in Spain and Residential property transaction costs in Spain, compared to the rest of Europe.