Bank of Spain: Rental Yields Soar to 9.8%

7 December 2017 – Expansión

According to the Bank of Spain, buy-to-let homes yield a return from rental income of 4.2% p.a. If to that figure, we add the appreciation in value of the underlying property, the total return amounts to almost 10%, on average. That figure is similar to those recorded during the real estate boom.

Buying a home to put it up for rent offers a much higher return than those generated by other financial assets, such as debt and deposits. Moreover, house prices are still much lower than they were ten years ago and still have the potential to rise. These factors, combined with the gradual recovery in employment and the enormous demand for rental properties, have created a very fertile scenario for investors, both for individuals as well as for Socimis and funds. For this reason, the major indicator of the residential sector is no longer just price – although that is important – but instead yield.

Homes now generate an average annual return of 9.8%, according to the Bank of Spain, which takes into account not only the rental yield but also the appreciation in the property value over 12 months. In other words, the yield is now 1.6 percentage points higher than it was a year ago, to bring it in line with the figures seen at the end of 2007, at the peak of the real estate boom.

This rise in returns is due to the increase in house prices and the rental boom. Increasingly more buyers are opting to acquire homes as a business, in the hope that those properties appreciate in value and generate more than 4% in the rental market (the average is 4.2%).

According to the latest study from Fotocasa – which Expansión revealed last Saturday – 24% of the people who have participated in the residential property market in the last year are investors. That figure exceeds 30% in the large cities, above all in Valencia (44%), Barcelona (36%) and Madrid (35%), according to data from Tecnocasa and the Universitat Pompeu Fabra.

“Now is a good time to buy to let, both for the long-term as well as for second home properties, given that both formulae are generating returns that, in the current context of low interest rates, cannot be found in any financial products or on the stock market”, says Beatriz Toribio, Head of Research at Fotocasa (…).

What’s more, the appearance of new real estate business models has spurred profits along in the large cities, in such a way that 20% of investors now use their homes as tourist rental properties. That high percentage is due to the new short-term let platforms, such as Airbnb, which allow them to obtain even higher returns than from the traditional rental market.

Nevertheless, 65% of investors still prefer the stability of having a long-term tenant. The remaining 15% buy homes not to put them up for rent, but rather to wait for them to appreciate in value and to sell them at a profit.

Market leaders

Madrid and Barcelona are spearheading this new property fever. In the Spanish capital, buying a home to let it out generates a gross annual return of 11.8% (from rental income and capital gains); that figure amounts to no less than 23.1% in the Catalan capital, almost twice as much (…).

The central areas of Madrid and Barcelona are experiencing a genuine profitability boom. In the Catalan capital, the Sants-Montjuic district stands out, with a gross annual return of no less than 32.9% (5.3 points from rental income and 27.6 due to price rises). It is followed by Eixample (26.8%), Gràcia (25.9%), Sant Martí (25.6%), Horta-Guinardó (24.9%) and Nou Barris (21%, although the latter is the most profitable district excluding price rises: 6.6%), which all exceed 20%. The centre (Ciutat Vella) generates 19% and the exclusive district of Sarrià-Sant Gervasi yields 13.2%

In Madrid, the Centro district comes close to 20% (19.7%); it is followed by Salamanca (19.2%) and Chamberí (18.8%) (…).

Something similar is happening along the coast. The highest returns in the beach areas are located in the Balearic Islands, Barcelona, Las Palmas, Huelva and Almería, where rental yields exceed 5.5%, and overall yields exceed 10% if we include the capital gains. The high combined return along the Malaga coast (17.9%) is particularly noteworthy.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Investors Are Buying More Homes Than Ever

12 September 2017 – El Mundo

House and rental prices are experiencing a robust increase, which means a perfect combination for the yield on homes to grow and the residential market to attract investors. In this context, according to the XXV Housing Market Report prepared by the Tecnocasa Group and the Universidad Pompeu Fabra (UPF), 28.7% of the second-hand house purchases closed during the first quarter of 2017 were made for investment purposes.

In fact, the volume of investors buying homes is higher than ever recorded by Tecnocasa and has almost doubled since 2013 (16.3%). “Investors are still finding good opportunities, as well as generating high returns from renting homes out”, says the study.

Tecnocasa took the opportunity to perform a detailed analysis of the investor profile. The first noteworthy fact is that this buoyant demand is coming from people who are older than those typically buying their first home. Specifically, more than half of the investor buyers are aged 45 years old or above. In terms of their employment status, 37.38% are self-employed, 36.18% have permanent contracts and 14.66% are pensioners. The self-employed and pensioner cohorts are both purchasing more for investment purposes than for their primary residence (11.96% and 10.28%, respectively). In terms of the nationality of the residential investors, Spaniards exceed foreigners hands down (85.9% vs. 14.1%).

The large increase in investors, to record levels, is not complaining at the sight of the juicy returns that homes are generating in comparison to financial products, given that the price of money is fixed at 0% and shows no sign of rising. Meanwhile, according to the Bank of Spainthe average home in Spain generates a return of 9.5% – a percentage that reaches the double digits only for tourist properties in certain areas of large cities. Of that gross figure of 9.5%, 4.3% comes from the rent itself and the remainder represents the gain from increasing sales prices.

That is because second-hand house prices rose by 8.24% YoY during the first half of the year, according to the study by Tecnocasa, which works with real prices of sales completed by the company itself. Moreover, the market has entered a positive spiral, which has seen second-hand house prices rise for six consecutive 6-month periods. Above all, in large cities such as Barcelona and Madrid, where second-hand properties are the most expensive in the country, costing €2,754/m2 and €1,970/m2, on average, respectively.

According to Tecnocasa, the significant presence of investors in the market is positive. “If it is true (as some people say) that a new bubble is starting to grow, it will be very different to the previous one (and much less harmful) given that it will not be based on loans, but rather on savings”, says the firm. In this sense, the real estate company stresses that 33.1% of primary residence purchases are paid for in cash, a figure that soars to 78.4% in the case of investors (…).

Moreover, the market for second-hand homes seems to have significant upwards potential, given that prices are currently 48.1% below the peaks of 2007, when the average price per square metre exceeded €3,500/m2.

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

Tecnocasa: Second-Hand House Prices Rose By 12% In Barcelona In H1

6 September 2017 – Expansión

The Spanish real estate recovery varies by neighbourhood. Whilst in smaller cities such as Zaragoza and Sevilla, second-hand house prices rose by 1.7% and 2.1% during the first half of the year, in Madrid and Barcelona, the value per square metre soared at a rate of 7.3% and 12.7%, respectively. On average, in Spain, second-hand house prices rose by 8.24% during H1, according to the latest report from the estate agent Tecnocasa and the Universidad Pompeu Fabra (UPF).

It is the largest increase registered in a single 6-month period since the price curve hit rock bottom at the end of 2013 and began its recovery with a slight increase of 1.12% at the end of 2014.

At that time, at the height of the real estate depression, the cumulative decrease in second-hand house prices peaked at 57% with respect to 2007. Nowadays, prices are 48.10% below the peaks recorded before the crash. The average value amounted to €3,500/m2 then, compared with €1,811/m2 now.

Despite the dizzying increase in prices currently being seen, there are no signs that a new bubble is being created. The CEO at Tecnocasa, Paolo Boarini, said yesterday that one of the most important factors to take into account is “the new attitude of the banks”. Whilst in 2007, mortgage loans represented 86% of the value of homes on average, that ratio has now decreased to 72%. (…). Moreover, mortgages that exceed the value of the home are no longer being granted, which was not the case during the years leading up to the burst of the bubble.

Tecnocasa’s report points to the ratio between the monthly mortgage instalment and a borrower’s monthly income, which is also one of the most significant risk indicators. To minimise the risk of non-payment, it is recommended that the aforementioned ratio not exceed 35%. At the end of H1 2017, the ratio between the mortgage instalment and the monthly income of mortgage applicants amounted to 25.5%. On average, mortgages in Spain cost around €375 per month (…).

In terms of the bargaining power in the market, according to data from Tecnocasa, the discount made by sellers with respect to the initial price was 2.7% in 2005, a figure that rose to 13.4% in 2012 and that currently stands at around 5.1% (…).

The study performed by Tecnocasa and the UPF is based on data from transactions brokered by the real estate agent itself involving loans advised by Kíron, the financial services company owned by the same group. José García-Montalvo, professor at the UPF and coordinator of the document, stressed that, unlike other reports, this document uses only real prices of actual sales and not the initial asking prices of homes for sale.

The most expensive square metre in Spain’s major cities was located in Barcelona for another half-year, at €2,754/m2, followed by Madrid, at €1,970/m2. The cheapest major cities include Córdoba (€1,009/m2) and Valencia (€893/m2).

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

Airbnb, HomeAway & Wimdu Outperform Traditional Long-Term Lets

23 February 2017 – El Confidencial

Traditional rental agreements (…), which are governed in Spain by the Urban Rental Act (LAU) and which allow a tenant to live in a home for an extended period of time, are starting to become scarce in some very specific areas of large cities such as Madrid and Barcelona. They are falling victim to the unstoppable progress of so-called tourist apartments or short-stay lets (available on a daily, weekly or monthly basis), which have grown like wildfire in recent years, thanks to the development of platforms such as Airbnb, HomeAway, Wimdu, Niumba, Rentalia and Booking.

Users consider that these assets offer a much more flexible and economic alternative than the product offered by the hotel sector. Meanwhile, homeowners have found a business niche and are generating extra income both from their own homes and from properties acquired as investments. Moreover, their yields are ranging between 4% and 8%, which is well above those offered by other traditional investment products at the moment, including traditional rental properties.

To give us an idea of the volumes being handled by these types of platforms, Airbnb has 13,000 online adverts in the city of Madrid, whilst Idealista has 8,700 adverts for rental homes. In Barcelona, the online platform has 20,000 adverts compared with 6,400 on the real estate portal.

Nevertheless, the problem is limited to very specific locations, such as Malasaña and Chueca in Madrid and Las Ramblas and El L’Eixample in Barcelona. There it is almost impossible to find a long-term rental home. As such, the few products that do come onto the market are leased in a matter of hours and at much higher prices than they were just a couple of years ago. (…).

Rental prices in Malasaña now rarely fall below €800 for a one-bedroom flat measuring just 40m2, but on average, homes there cost between €1,200 and €1,300 per month. On the real estate portal Idealista, there are a few 60m2 flats for rent, for which the owners are asking €2,700/month and even €3,500/month for luxury properties.

Emergence of individual investors

Airbnb defends the “home-sharing” concept, saying that it does not remove available housing from the market because people who live in these homes are still around, they are just sharing their primary residences. Some of these people are using the money to pay for their housing costs”, says the platform. “Studies have been carried out in several cities around the world, showing that the number of homes advertised on Airbnb for exclusively professional use is too low to have any impact on the housing market”.

Nevertheless, the high returns offered by tourist apartments have led many individuals and small-time investors to buy homes in these areas, to subsequently sell them or rent them to tourists. Specifically, individual investors are behind 3 out of every 10 house sales in Madrid, according to data from Tecnocasa. (…).

A very localised phenomenon

What is happening in Malasaña is also being seen on some other very specific streets both in Madrid and Barcelona, where rental prices have really soared. According to Urban Data Analytics, rental prices have risen by more than 20% in neighbourhoods such as Sant Andreu and Sants-Montjuïc, and by 15% in areas such as Gràcia, where prices decreased slightly during the crisis. (…).

According to Bankinter, in its latest report about the Spanish residential sector, these price increases will not last forever. “In our opinion, these double-digit increases, which are driven by a shortage of supply and the boom in tourist rentals, will not last in the long term, nor will they spread to the market as a whole, especially if new legislation is introduced to limit the number of tourist homes a given owner may rent out”.

Sources at Airbnb insist that “The increases in house and rental prices are due to normal factors at play in the real estate market, including: the high demand to live in cities, the appeal of real estate as investment property, the lack of space to build new developments…also, the pressure on house prices is not just being seen in Barcelona, it is happening in all of the large cities around the world (….). House prices were rising before Airbnb ever existed (…)”.

Original story: El Confidencial (by E. Sanz)

Translation: Carmel Drake

Tecnocasa: Rental Prices Rose By 4.72% In 2016

21 February 2017 – El Mundo

The rental market is booming, in particular, rental prices. They are accelerating significantly in the cities of Madrid and Barcelona, above all, in the latter.

In 2016, the average price of second-hand rental homes in the Catalan capital soared by 11.84% in YoY terms, whilst in the Spanish capital, prices rose by the not insignificant amount of 6.26%. In this way, the average increase in rental prices across the country with respect to 2015 amounted to 4.72%, according to the III Report about the rental market 2016 prepared by Tecnocasa and the University Pompeu Fabra (UPF) in Barcelona.

Converting these percentages into absolute terms, the average monthly price per m2 rose to €12.09/m2 in Barcelona, to €11.20/m2 in Madrid and to €8.87/m2 across Spain as a whole. “The difference (between the two largest cities in the country) is growing”, say sources at Tecnocasa.

According to the real estate network, other indicators that provide further evidence of the boom in the rental market include: the average period of time required to market a home; the final price with respect to the asking price; and the number of visits needed for a property to be leased. In terms of the first of these factors, it currently takes only 30 days to lease a home, which is 11 days less than in 2013 and another indication of the high demand that exists nowadays.

In the same vein, the number of visits needed to lease a home decreased to 7.22 on average in 2016, a figure that is well below the number registered in 2012 (8.44). Finally, in light of these parameters, it is hardly surprising that the final agreed price is increasingly closer to the asking price. “Tenants’ bargaining power has decreased. The final rental price paid is just 3% below the asking price”, according to Tecnocasa. In 2012, that discount averaged 6%.

Finally, sources at the real estate firm and the university responsible for the study describe the profiles of typical landlords and tenants. On the supply side, there are increasingly more pensioners (32%). Moreover, 95% of landlords are Spanish and 65% are married.

In terms of the typical tenant, they are usually single (58%), with a permanent employment contract (68%) and aged between 25 and 44 years (73%). Like in the case of landlords, the majority are Spanish (73%).

Original story: El Mundo (by Jorge Salido Cobo)

Translation: Carmel Drake

Sabadell Converts Solvia Into A RE Franchise

14 October 2016 – Cinco Días

Banco Sabadell is very clear about its future, it wants to take advantage of the boom in the real estate sector to harness the stock of foreclosed assets that it still holds on its balance sheet, which it largely inherited from CAM.

To date, the bank chaired by Josep Oliu has decided to hold onto Solvia, the platform that owns all of its foreclosed assets. Initially, it planned to list it on the stock market, but it quickly ruled out that option. It also studied several offers to sell a majority stake in its real estate platform to large investment funds, like other players in the sector did, including Santander with Altamira and Popular with Aliseda, amongst others. But, it also decided against that idea after it saw demand for real estate grow in recent years.

Since 2013, when the market for the sale of properties became active once again, the heads of Solvia have seen that the transactions that have grown by the most, albeit timidly, are those between individuals. And as such, Sabadell has decided to offer its services to third parties, on both the buy side and sell side. In this way, Solvia “is beginning a new phase in which it is placing its strategic focus on offering its services not only to those interested to buy a home, as it has done to date, but now also to individuals wishing to sell their homes”, explained the bank.

To this end, it is going to restructure its commercial network, by turning Solvia into a franchiser. It will thereby create a network of franchisees with physical branches across Spain. Each franchisee will have the right to sell assets owned by Solvia’s current clients (Sabadell, Sareb and various funds) and by individuals whose homes are located in their respective area. Solvia will also have its own network which, for the time being, will comprise two offices, one in Sevilla and one in Alicante. The idea is that by the end of the year, Solvia will have 12 of its own offices and 24 franchised branches. It will also be able to sell properties through the bank’s branch network. In this way, Sabadell will compete directly with estate agents such as Tecnocasa and Redpiso, for example.

Sources at the real estate agents consulted are certain that other banks will follow Sabadell’s lead. Solvia’s franchisee offer is open to both the network of approved real estate agents (Apis), as well as to other professionals in the sector, such as entrepreneurs and investors. The idea is that Sabadell will reserve a certain number of locations for young people (recent graduates with excellent academic records) who want to start a business and learn on the job.

Since 2012, Solvia has been one of the firms that has sold the most properties in Spain. Its sales have exceeded €2,500 million year after year on a recurring basis, say sources at the bank. An important proportion of these transactions involve the sale of homes and as such, the project to become a real estate agent has been born. (…).

Original story: Cinco Días (Ángeles Gonzalo Alconada)

Translation: Carmel Drake

Investors Now Account For One Third Of Home Purchases

9 September 2016 – Expansión

Barcelona, Madrid, Valencia, Zaragoza and Málaga are experiencing a mini boom in the purchase of homes for rent, thanks to the appreciation of property prices and significant growth in rental prices.

The recovery of the residential market has once again sparked investors’ interest in property, thanks to the high returns that they offer (in the form of rental income) and the expectation of significant and consolidated price rises (appreciation in value). So much so that investors now account for one out of every three homes purchased in Spain’s major cities, according to data from Tecnocasa.

Barcelona is leading the investor boom; there, 40% of homes sold are intended to be let out. That means that just 60% of the buyers acquiring a home in the city actually plan to live in it. Barcelona is followed by Valencia, where the percentage of homes being sold for their subsequent rental amounts to 37%. Madrid is the other major city where individual investors – primarily, although not exclusively – account for one third of the real estate cake, specifically 32%.

The average in Spain amounts to 26%. The other three major real estate parks in Spain – Zaragoza (28%), Málaga (25%) and Sevilla (22%) – also move in this range.

Why are we seeing this mini boom in property investment? The answer is simply: because residential properties are currently offering an average rental yield of 4.7%, and that rate increases to 10.9% if we add the gains resulting to the rise of property prices, according to official data from the Bank of Spain. These figures are extremely appealing, especially compared to the returns offered on public debt (0.987% yesterday), deposits (0.2% in July) and the stock market (-15% in August).

This has led to a mini boom of investors who have found refuge in the residential market, where the risks are low and the returns are tangible. “In fact, the new investors include lots of retired people who are using income from these investments to supplement their pensions”, said José García Montalvo, Professor of Economics at the University of Pompeu Fabra.

Moreover, rental prices are rising significantly in the major cities. In August 2016, it was 14.8% more expensive to rent a flat in Barcelona than it was 12 months ago. In Madrid, prices increased by 7.5% during the same period. “Nevertheless, rental prices cannot continue to rise at such a rapid rate”, warns García Montalvo, because “although rental prices have decreased significantly since 2008, the income (of tenants) has also decreased”.

The most sought-after areas for tenants and those that have resisted the real estate crisis the best are the most attractive for investors. In fact, according to Manuel Gandarias, Head of Research at pisos.com, “the highest price rises are being seen in areas that suffer from a lack of high quality product…”.

So, is now a good time to invest? “House prices are increasing significantly, but for the time being, rental prices are rising in unison, which means that investors can obtain returns”, said García Montalvo. But this train will leave the station sooner rather than later. (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Tecnocasa: Second-Hand House Prices Rose By 8% In H1

7 September 2016 – El Mundo

The average price of second-hand housing in Spain rose by 7.99% YoY during the first half of 2016, to €1,666/sqm, according to the XIII Report about the residential market, prepared by Tecnocasa and the University of Pompeu Fabra (UPF) using sale/purchase and mortgage data from the real estate company.

Despite the significant increase, this average price is still well below the maximum values that the market reached at the end of 2006 and the beginning of 2007, when the average cost per square metre of second-hand homes amounted to more than €3,500. (…).

The city of Barcelona, which saw a price rise of 9.45%, led the increases during the first half of 2016, followed by Málaga (9.21%) and Madrid (9.03%). In this way, the cost per square metre rose to €2,443/sqm in Barcelona, to €1,044/sqm in Málaga and to €1,835 in Madrid.

In this regard, Tecnocasa notes that “we are seeing a two-speed recovery”, given that prices in cities such as Guadalajara, Sevilla, Zaragoza and Valencia increased by less than 2% (during the same period).

At a press conference held to present the report, the Director of the Department for Analysis and Reports at the Tecnocasa Group, Lázaro Cubero, explained that rental prices are also increasing, in the same proportion, and the average mortgage is also rising (€91,808), which represents an increase of 9.8%, although still represent less than half the lending figures in 2007 (€185,462). In this sense, it is worth remembering that the average monthly repayment amounts to €367.

Cubero stated that prices are still “attractive” – they are 52% lower than they were in 2006 for Spain as a whole – and financing conditions are very favourable, thanks to low interest rates, at a time when vendors are still having to apply discounts to their initial asking prices to achieve a sale.

The CEO of the Tecnocasa Group, Paolo Boarini, indicated that financial institutions are still behaving in a conservative way when it comes to granting mortgages: they are granting 73% of the appraisal value, and “it is very hard for people with temporary contracts to obtain a mortgage; self-employed people also face challenges”.

Meanwhile, for the Professor of Economics at the UPF and the coordinator of the report, José García Montalvo, the increase in the uptake of fixed-rate mortgages is “a significant change in the right direction”. He criticised Spain in this regard, stating that variable rate mortgages do not account for 95% of the total market in any other country, given that this means all of the risk in terms of interest rate fluctuations is transferred to the client. (…).

On the other hand, the Tecnocasa Group brokered 4,327 house sales in Spain during the first half of the year, up by 22% compared with the same period in 2015, as well as 1,445 mortgages, up by 28%, through its network of 465 offices (19.23%) and 2,000 sales agents. (…).

Original story: El Mundo

Translation: Carmel Drake

Tecnocasa: Second-Hand House Prices Increase By 1.12%

19 February 2015 – El Mundo

Second-hand house prices have increased in value (y.o.y) for the first time since 2010.

The average price is now €1,458 per m2 after a cumulative decrease of 58% since 2007.

“The decrease (in house prices) has come to an end and we expect the market to remain stable for a while”.

House prices are also recovering in the second-hand home segment. Without a doubt, the hardest hit by the crisis. According to Tecnocasa’s 20th Report about the housing market (el XX Informe sobre el mercado de la vivienda), used homes increased in value by 1.12% during the second half of 2014, which represented the first increase since 2010. From the peaks recorded during the first half of 2007, this real estate segment has experienced a cumulative price decrease of 58.21%. During the first half of 2014, the fall was minimal, a token 0.04%.

The company reports that the average cost of second-hand homes is now €1,458 per square metre and that, therefore, the slump in prices has come to an end. “The decreases have come to an end and we are beginning a phase of stability”, says the firm, which prepared the study together with the University of Pompeu Fabra (UPF) of Barcelona. “In any case”, it adds, “we expect prices to remain stable for some time”.

By city, Sevilla recorded the largest decrease in the cost of used housing (-4.5%), whilst Barcelona experienced the greatest increase (+5.84%). “The decline in Sevilla reflects the fact that prices began to fall a little later in Andalucía”, said Tecnocasa in a statement. In terms of average values, the lowest continue to be in Valencia (€775 per square metre) and the highest in Barcelona (€2,011/m2).

José García-Montalvo, Professor in Economics at UPF and the coordinator of the report, wanted to stress that whilst the sector “continues to be significantly effected by an improvement in the short term”, he does not expect “a price explosion”, but rather a period “marked by stability”. In this sense, he explained that there has been a “change in terms of expectations” in the Spanish real estate sector, since the market “is no longer ruled by buyers”; sellers are “again able to set prices and conditions”.

The average mortgage decreases to €90,333

Paolo Boarini, CEO of the Tecnocasa Group in Spain, has analysed the financial data and house buyer profile for the second half of 2014. During the period, the average mortgage decreased by 2% (on a year-on-year basis compared with the second half of 2013). This decrease brings the average mortgage down to €90,333.

According to the report, the decrease in the average mortgage is due to the low level of house prices and the decision by banks to reduce loan risk. Moreover, the percentage of mortgages granted to people with temporary employment contracts has deceased from 38% (of the total) in 2005 to 7.6% in the second half of 2014.

In terms of the loan to value ratio, it remains low (72% in the second half of 2014), although, that did represent an increase from 67% in the first half of 2014. The reductions in interest rates and in the size of mortgages has contributed to a decrease in monthly mortgage payments. Such payments averaged €976 in 2007, but now amount to €382. This means that the ratio between the monthly mortgage payment and the monthly salary of the borrower now sits below 30%; a figure that reflects the conservative behaviour of credit institutions.

Boarini highlights that the market is undergoing a period of “stabilisation”, after the speed of decline “decreased in recent years”. In addition, he assures that we are currently seeing “a situation that would not have occurred in previous years, with low prices and good financing conditions”.

Methodology

The Tecnocasa Group’s report has been prepared using data from transactions brokered by its associates. Specifically, based on sales managed by Tecnocasa and loans granted by Kiron, the entity’s financial services company.

Original story: El Mundo

Translation: Carmel Drake

Tecnocasa: Average Rents Reached €8.54/sqm In 2014

19 February 2015 – El Mundo

Rental prices (in 2014) were slightly higher (+0.47%) than at the end of 2013.

The market is suffering its greatest declines in Madrid (-1.57%) and Barcelona (-0.59%).

The typical landlord profile: pensioners (28%), Spanish nationals (96%) and married (70%).

The typical tenant profile: single people, with permanent employment contracts, aged between 25 and 44 years old and Spanish.

The Tecnocasa Group has presented its first report about the residential rental market in Spain (a groundbreaking study). Highlights show that the average cost of rental homes amounted to €8.54/square metre (in 2014), which is slightly higher (+0.47%) than at the end of 2013.

With these figures on the table, Tecnocasa says that “rental prices have remained stable (upwards)”, although it acknowledges that there has been a slight decline in the two largest Spanish cities. Specifically, rents became 1.57% cheaper in Madrid and 0.59% cheaper in Barcelona, where prices amount to €10/sqm in absolute terms.

One must go back to 2007 to find the last report about rental prices nationwide. The then Housing Minister, María Antonio Trujillo, presented the OEVA (the State Observatory for Rental Housing or ‘Observatorio Estatal de la Vivienda en Alquiler’), which was the first official survey about the market. It was also the last. That study reported that the average price of rental housing was €7.20/square metre.

Tecnocasa’s study shows that the profile of landlords, i.e. of the people that lease out their properties, includes a high percentage of pensioners (28%), Spanish nationals (96%) and married people (70%). In terms of the profile of tenants, they are single, with permanent employment contracts, aged between 25 and 44 and, for the most part, are Spanish.

Lázaro Cubero, Director of the Department for Analysis and Reports (Departamento de Análisis e Informes or DAI) at the Tecnocasa Group, notes that rental prices have decreased by less than purchase prices in the last year, which means that “the yield a landlord can obtain by renting out a home that he/she owns is now greater”. Specifically, this yield has increased to 7.41% on average for the whole of Spain.

These figures represent the findings of the first report about the rental market conducted by the Tecnocasa Group and the Univerisdad Pompeu Fabra (UPF), based on a study that analyses data extracted from the property rental agreements brokered by Tecnocasa’s network (of agents) in Spain between 2012 and 2014.

Original story: El Mundo

Translation: Carmel Drake