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What return will you make on your Spanish Property in 2020? +8.5%

30 Jan
4.6 (92.73%) 11 vote

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Follow this link if you are looking for the last update on the real estate prices in the top 20 Spanish cities.


Spanish property market 2020 return is strong: +8.5%


According to statistics released by the Central Bank of Spain in November 2019, the return expected on the residential Real Estate market in Spain is 8,5% – Blue line on the chart.

This performance comes from two sources:

  1. gross rental yield estimated at 3,83% Green line on the chart and
  2. capital gain estimated at 4.67%.

May 2020 update: due to the Coronavirus, there is a strong possibility that prices will become negative now.

Don’t miss our last update: What are the impacts of Coronavirus on the Spanish Real Estate Market?

Coronavirus Spanish real estate


This return of 8.5% is quite strong!




Have a look at our interactive chart (yes when you come back, it will be updated)



The second good news: mortgage rates are close to 2% and remain at the bottom of their 10-year range 


2.02% in November 2019, Red line on the chart



You can always find that information updated on our “Returns & Mortgage Section” and read our article updated every month with the current mortgage conditions: Find the best mortgage rate in Spain

Maybe interest rates won’t stay that low for a long period of time… they rose to 3% during the summer of 2018 but back to 2% one year later.

Have a quick look at our Spanish mortgage calculator if you want to know what is your purchasing power to buy a property in Spain:


The first real 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 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 11.2% covers by more than 5 times the mortgages costs.

Follow this link if you want to learn more about our partner, one of the leading Mortgage brokers in Spain.


The third good news: Real estate prices remain lower than the prices of 10 years ago


Is there a lot of downside from here? Check the chart of real estate price evolution before and after 2007:



The fourth good news: Spain has the second weakest performance in Europe on a 10-year time frame

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



As you saw on this histogram, Spain has the weakest performance on a 10-year time frame. Click on the chart to check the performance for other period lengths.


The fifth good news: Spanish Real Estate is cheap and has the highest yields vs many European Cities


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Invest in property in Spain? Spain is in the sweet spot for property investment!

Buy to let? Spain offers some of the best returns in Europe:

  • Madrid has the highest rental yield in Europe and 
  • Barcelona is the fourth cities in Europe with the highest yield according to Deloitte.

Check the best rental Yields for the major European Cities, Madrid and Barcelona have rental yields close to 4.5%.



Barcelona and Madrid are the 5th and 8th most expensive European cities in terms of price/m²…




The sixth good news: Activity is picking up

Close to 100.000 properties were bought by foreigners in Spain in 2019 and more than 475.000 by Spaniards.


It looks like others agree with our conclusions…

Check for more information our up to date pages 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 (click on the picture):


Here is as well our report on the Most active cities in Spain in 2019 (in terms of transaction).

Spanish economic activity remains strong

Check our up to date tables of a few Economic indicators in Spain:

  • Unemployment went from 26% to 14%, and should decrease further to 13.4% en 2020
  • Car sales are recovering, +60% vs 5 years ago
  • GDP is one of the strongest in Europe with expectations for a growth of 2019 above 2%

We wrote this article on the Spanish GDP expectations:  Spanish GDP growth to remain strong up to 2021


Financial markets suffer from negative performance and volatility

With the negative returns noticed in the financial markets in 2018 and the higher volatility, as long as the economy is growing, investors should keep a strong interest in real estate investments.


Other experts’ expectations for 2020


Here were the expectations from experts last year

In an article published by the Spanish journal, EXPANSIÓN, on the 8th of January 2019, experts predict for 2019 price increases of 5% and 13% more transactions. At the same time, they see rental prices to continue to increase by 10%. While Barcelona and Madrid had strong prices increases since 2014, they think that the price action could be more for second-tier cities like Valencia, Malaga, Palma or Seville. Other cities like Alicante, Tarragona, Bilbao, Murcia or Zaragoza could see interest according to them. Read the article in Spanish.

To be honest, we noticed this trend for Valencia starting already end 2017. That’s why we organised there our first Real estate city trip with our local property finder. Check our article on that if you want: Real estate market Valencia Citytrip feedback – April 2018 We noticed as well a lot of interest for Tenerife on our website.


Do you want to search further?

First start with our exclusive property buyers guides:


Have a look at our interesting articles:


Source: Deloitte property Index 2019,  Overview of the European Residential Market


Looking for a local property hunter, a local lawyer, … any expert in Spain? Ask us directly!


Senior analyst and strategist at HTBIS

Check the full HTBIS team here


Our quick FAQ on the subject

Is it a good time to buy property in Spain 2020?

Yes, for sure, as you can see, prices are rising since 2014 but are far from the top of 2008. Returns are healthy and not excessive while financing remain low. Read more in our paper.

Are property prices in Spain falling?

No prices are not falling anymore in Spain. Real estate prices are rising since 2014 and remain far from the top: current average price per square meter in Spain is €1638 (end September 2019).

Can I get residency in Spain if I buy a house?

It depends if you are part of EU or not and if you have enough financial means to live. If you are not from EU countries, there are solutions, have a look at our article about the golden visa.

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4.6 (92.73%) 11 vote