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Spanish real estate estimated return is back strongly
According to statistics released by the Central Bank of Spain on December 2017, the return expected on the residential Real Estate market in Spain is of 10,9% (Blue line on the chart).
This performance comes from two sources: gross rent yield estimated at 4,2% (Green line on the chart) and the capital gain estimated at 6.7%.
The first good news: Yes, 10.9% is your return as of December 2017!
It is the highest number since 2008!
Have a look at our interactive chart (yes when you come back, it will be updated)
The second good news: YES, mortgage rates are close to 2% and remain low (2.2% now Red line on the chart).
You can always find that information updated on our “Returns & Mortgage Section”
Maybe they won’t stay that low for a long period of time… Look at inflation, it is picking up… Look at long term interest rates in the United States… they are rising…
The 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 10.9% nearly covers by more than 5 times the mortgages costs.
The third good news: Real estate performance remains very negative compared to 10 years ago (is there a lot of downside?):
Have a look at the comparison of the real estate market in Spain vs other European countries on any time frame between 3 months and 10 -year time frame
The fourth good news: Spain has the weakest performance of any European country on a 10-year timeframe
The fifth good new: Activity is picking up: 83 000 properties bought by foreigners
You should take into account the increase of activity in the market by both nationals (425 000)and foreigners (83 000) during the last year to September 2017, as you can notice on this chart:
It looks like others agree with our conclusions…
Check for more information here on the Spanish national real estate market (prices and activity) and on the Spanish regional real estate markets (prices and activity).
If you want to have a deeper analysis, city per city, we would suggest reading our full report on that:
If you want our list of the top 10 reasons why we think that the Spanish market is a nice real estate opportunity right now follow the link.
We bought ourselves in 2014, let’s put our money where our words are 😉 .
Last but not least, the Spanish economic activity is strong as well:
Check our up to date tables:
- Unemployment went from 26% to 16%
- Car sales are booming
- GDP is one of the strongest in Spain
Don’t hesitate to share the good news with your friends. They will thank you later.