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Spanish Real Estate return estimated at 8,4%

29 Jan
2017
  • Real Estate estimated Returns in Spain Chart

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Real estate estimated return is back in strong positive territory

According to statistics released by the Central Bank of Spain in December 2016, the return expected on the residential Real Estate market in Spain is of 8,4%.

This performance comes from two sources: gross rent yield estimated at 4,4% and the capital gain estimated at 4%.

Real Estate estimated Returns in Spain Chart

First real positive return since the crisis of 2008

As you can see on our chart, the estimated return became slightly positive for the second time since 2008 at the start of 2014. In 2010, the estimated return went slightly positive but it was not enough to compensate the mortgages costs. This time, the performance is much stronger as the estimated profitability of 8.4% nearly covers by more than 3 times the mortgages costs.

While the estimated profitability was slightly positive for the first time in 2010, it was not enough to compensate the mortgages costs. This time, the performance is much stronger as the estimated profitability of 8.4% nearly covers by more than 3 times the mortgages costs.

 

Real estate performance remains very negative on 10 years

Have a look at the comparison of the real estate market in Spain vs other European countries on a 10-year time frame

EUROPEAN HOUSE PRICE INDEX MONITOR LAST 10 YEAR

As you saw on this histogram, Spain as the weakest performance just in front of Ireland on a 10-year timeframe.

Have a look at the many reasons why we think that the Spanish market is a nice real estate opportunity right now. We bought ourselves in 2014, let’s put our money where our words are 😉 .

Another positive factor: Activity is picking up

You should take into account the increase of activity in the market by both nationals and foreigners as you can notice on this chart:

Foreigners vs Spaniards buying real estate in Spain, History of transactions

It looks like others agree with our conclusions…

 

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