Tag: increases

Fotocasa: Rental Home Prices Rose By 9.5% YoY In Q1

28 April 2017 – El Mundo

The average price of rental housing in Spain rose by 9.5% YoY and by 5.9% QoQ during the first quarter of 2017, according to the Real Estate Index compiled by the online portal Fotocasa. In this way, the average rental home cost per square metre amounted to €7.93/m2 as at March 2017.

This quarterly increase in rental home prices was in line with the trend observed in 2016. In the absence of official statistics, the index from Fotocasa corroborates the anecdotal evidence being seen on the street.

“Rental prices are rising significantly because demand is much higher than supply, above all, in those areas with the largest volumes of economic, tourist and demographic activity. Month after month, in regions such as Cataluña, Madrid and the Balearic Islands, we are seeing how the distance between the peak prices recorded in 2007 and 2008 is decreasing, and in some cities in those areas, the price per square metre has now reached the pre-crisis maximum, such as in the case of Barcelona”, explained Beatriz Toribio, Head of Research at Fotocasa.

In fact, the increase recorded during the first quarter of 2017 is the most markedsince Q1 2007, according to the Real Estate Index, when prices rose by 4.9%. Since then, the quarterly rental price has done nothing but decrease, with some exceptions in one-off quarters in 2011 and 2014. In 2015, the quarterly rental price began to recover, with increases of 2.8% and 1.5% in the first and second quarters, respectively, trends that continued in 2016, with the exception of Q3 2016, when prices fell by 2%.

At the inter-annual level, rental prices rose by 9.5%, the most marked increase in the history of the Real Estate Index, which has been compiled since January 2006. Moreover, during Q1 2017, rental prices rose in 14 autonomous regions at the quarterly level and in every region at the annual level. (…).

Evolution by autonomous region and province

Since reaching their maximum price in May 2007 (of €10.12/m2), rental home prices have recorded a cumulative decrease of -21.7%. In this regard, only three autonomous regions have recorded cumulative decreases of more than 30% since they peaked five years ago. In this way, Aragón is the autonomous region where rental prices have fallen by the most (-38.7%), followed by Castilla-La Mancha (-34.1%) and Cantabria (-31.3%).

During the first quarter of 2017, rental price increases were recorded in 14 autonomous regions, with the rises ranging from 5.4% in Cataluña to 0.4% in Castilla y León. Regarding the evolution by province, rental price increases were recorded in 36 provinces with respect to December 2016, with the rises ranging from 8.6% in Guadalajara to 0.2% in Alicante. By contrast, rental prices decreased in 14 provinces with the reductions ranging from -0.2% in Toledo to -3.6% in Ávila. (…).

By municipality, the town with the highest rental price was Barcelona, at €15.15/m2/month, followed by Eivissa (€14.60/m2/month), Sant Cugat del Vallès (€13.41/m2/month), Sitges (€12.85 /m2/month) and Castelldefels (€12.85/m2/month).

Original story: El Mundo

Translation: Carmel Drake

Idealista: RE Sector Is More Profitable Than A Year Ago

23 July 2015 – El País

Investment in real estate in Spain are more profitable now than it was a year ago, according to a report published by Idealista about the second quarter of the year. And even in the worst of cases, the return on property is twice as high as the yield currently offered on 10-year State Bonds (2%).

Retail premises continue to represent the most attractive real estate investments. In fact, buying a shop or store to let in Spain now generates a gross yield of 7.6%, compared with 6.2% a year ago. The highest returns are obtained in Córdoba (9.2%) and Granada (8.5%), followed by Las Palmas de Gran Canaria (8.3%), Málaga (8.1%) and Zaragoza (8%). Yields in Madrid and Barcelona amount to 7.6% and 7.5%, respectively. Castellón offers the least attractive premises for investors (with an average return of just 4.6%), followed by Salamanca (5.3%) and Cádiz (5.6%).

By contrast, garages offer the lowest yields – they ended the second quarter of 2015 with an average return of 4.6%, up from 3.6% in June 2014. Even so, the returns are still more attractive than those offered by 10-year bonds. The highest yields on garages are obtained in Toledo (5.3%), followed by Las Palmas de Gran Canaria (5.3%), Santa Cruz de Tenerife (5.3%) and Pamplona (5.1%). The towns with the least profitable garages are A Coruña (1.6%), Barcelona (2.3%) and Salamanca (2.6%). The yield on garages in Madrid is 3.3%.

Investment in buy-to-let housing has increased over the last twelve months. Such properties offered a gross return of 5.5% at the end of the second quarter versus 4.9% twelve months ago. Lleida is the most profitable of the Spanish capital cities, with an average return of 7.8%. It is followed by Las Palmas de Gran Canaria (6.2%), Palma de Mallorca (5.8%), Huesca (5.7%) and Huelva (5.7%). The rental yield in Madrid is 5%, just above that of Barcelona (4.8%). Nevertheless, the lowest yields in Spain are those received by the owners of rental properties in Ourense (3.3%), A Coruña (3.6%), San Sebastián (3.8%) and Lugo (4%).

Offices generate an average yield of 6.3%. Offices generate the highest returns in Vitoria, where the gross average yield stands at 7.5%. It is followed by Sevilla (6.6%), Santa Cruz de Tenerife (6.5%), Zaragoza (6.3%) and Las Palmas de Gran Canaria (6.1%). In Barcelona, offices yield a return of 5.8%, whilst in Madrid they average 5.6%. At the other end of the scale are the returns in Valencia (4.8%), A Coruña (4.9%) and Alicante (4.9%). The office market is not as uniform as those of other products, and so it is impossible to obtain statistical data about more than half of the Spanish capital cities.

For the preparation of this study, Idealista has divided the ‘average sales price offered’ by the ‘rental price asked by owners’ in different markets for the quarterly indices of homes, retail premises, garages and offices relating to the second quarter of 2015. The result obtained is the percentage gross yield that owners earn from letting out their homes.

Original story: El País

Translation: Carmel Drake