Idealista: Yields On Residential Investments Reach 6.1%

19 July 2016 – El Economista

Yields on residential investments amounted to 6.1% in the second quarter of 2016, compared with 5.5% a year ago. Moreover, this percentage is significantly higher than the margin offered on 10-year bonds, which has hovered around 1.5% in recent placements.

Those are the findings from a study conducted by Idealista, which compares the relationship between the sale and lease of different real estate products to calculate their gross yields.

According to this analysis, commercial premises retain their position as the most profitable real estate investment. As such, buying or leasing a retail property generates a return of 7.7%, in line with the yield reported a year ago. Meanwhile, offices offer a return of 7.3%, i.e. one percentage point more than twelve months ago, and yields on garages have soared to 5.6%, from 4.6%.

Regional differences

Lleida is the most profitable of Spain’s regional capital cities, with average returns of 7.7%, followed by Palma de Mallorca (6.7%), Las Palmas de Gran Canaria (6.5%), Alicante (6.4%) and Huelva (6.3%). The yield in the cities of Madrid and Barcelona is 5.5% in both cases.

Nevertheless, the lowest returns in Spain are those obtained by homeowners that lease their properties out in San Sebastián (3.7%), Ourense (3.7%), A Coruña (3.9%) and Zamora (4.3%).

Original story: El Economista

Translation: Carmel Drake