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 |
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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 |
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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 4.00% 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 4,300 to EUR 6,000, or around EUR 225,000-300,000 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 4,700 to EUR 5,900, or around EUR 265,000 to 290,000 for a 50 sq. m. apartment. 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 3,100 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 950-1,100 euros per month, while 120 sq. m. apartments will cost around 1,750-2,500 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.
Comments
ShawnMichael | October 20, 2014
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Michael John | October 29, 2014
Your property analysis is attractive and the rates and percentages you show in your article provides the clear facts of the property value and with this, help many real estate professionals can get the idea from this post if they have someone to buy or sell their property. Sedona AZ real estate professionals are also interested in such real estate property guide and I do agree with Shawn too.
Gustavo | June 12, 2016
Prices are definitely recovering after too many years of recession. The huge property stock held by banks have undermined the market prices. Since end 2014 and also 2015 Investing in Spanish property was more of finding bank repos in end 2015 and beginning of 2016 we can see that non bank property are changing hands and prices are stable and on the upside month after month. finding the right property are like kisses..location location location Invest in Spain Real Estate are here to help. Thanks for a great site with so much interesting info.
KG1 | September 07, 2018
I am afraid your numbers are not realistic unfortunately and make no sense from an investment point of view. I have been traveling to Madrid a great deal for the last 8 years and have looked to purchase a place in the Chamberi/Almagro/Trafalgar district. If you look for example on your own website for a nice place in this area, the prices listed per square meter are actually more expensive than Paris! (Don't get me wrong; I prefer Madrid to Paris). These prices don't even come close to being justified by the rents they can get. (Nor is it a matter of negotiation, as the price differences would be simply huge). I have come to the conclusion that it's far far better to invest/purchase in the US (LA for example) and then simply rent a place in Madrid. (Even Berlin is not justified now as compared to the US). I wish I were wrong, but I am not!
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