While the return on investment in housing slowed down across the board in Spain between July and September (up to 7.4% on average), eight provincial capitals reached their all-time high for this rate of investment. Ávila, Burgos, Ourense, Pamplona, Pontevedra, San Sebastián, Toledo and Valladolid maintain an upward path for those investors who are thinking of buying a house to put it up for rent.
They are not the cities with the highest returns, nor the most populated cities in the country, but these eight provincial capitals have reached their historical maximum in the rate of real estate investment in housing to put it up for rent during the third quarter of 2018, according to the Profitability Report published by idealista.
San Sebastián, an example that a high price does not mean greater profitability
San Sebastián stands out above all of them. The Gipuzkoan capital is one of the cities with the lowest profitability in the entire country, with 4.4% between July and September. Donosti is the second most expensive city in Spain, with its 4,257 euros/m2 and only surpassed by Barcelona, and the third in price of rented housing (15.6 euros/m2). However, this low profitability compared to the rest of the capitals represents its highest point since idealista collected the profitability data. Having one of the most expensive homes in the country does not mean achieving greater profitability for the investor.
Another of the capitals that had one of the lowest rates of return in the past quarter was Ourense. Despite the fact that its 4.5% was one of the smallest indices in the national group, it reached its all-time high last summer, consolidating above the 4% it reached from 2017.
Together with Ourense, it also appears Pontevedra marking its maximum in the historical series with 5.3%, equaling the data registered at the end of 2017. In the first half of the year, its rate of return had decreased to 5%, but last summer it returned to its highest peak . The price of housing in both Galician capitals does not exceed 1,400 euros/m2.
Ávila, good profitability at cheap prices
On the opposite side to these lower returns appear the new brands registered by Ávila (6.6%) and Valladolid (6.2%), adding new maximum peaks in their particular rate. he capital from Pucelana is placed above 6% for the first time, after touching it for the last two years.
Notable is the case of Avila. The capital of Avila is the cheapest in Spain to buy a home with an average price of 929 euros/m2. While the price of their rentals has risen by 13.1% in the last year to stand at 5.1 euros/m2. The profitability index in the capital of Avila has risen one percentage point compared to the same period in 2017 and has already exceeded 6.5% for two consecutive quarters, never seen in its records.
Among the Spanish capitals, Las Palmas de GC was the most profitable during the summer, with 7.1%, followed by Lleida (7%), S/C de Tenerife (7%) or Huelva (6.9%). Meanwhile, the rate of return in the two large cities remains at 4.7% in Barcelona, or 5.1% in Madrid.
These cities are joined by another capital of Castilla y León such as Burgos, as well as Pamplona and Toledo. The Navarrese capital reaches 5% profitability for the first time, after touching it in recent quarters. Meanwhile, the capital of Burgos remains completely stable and continues to add its highest rate of return for the ninth consecutive quarter, at 5.2% since the 3rd quarter of 2016.
For its part, the Castilian-Manchegan capital repeats its particular record for the fourth time in the last three years, with a 5.7% rate of return, which has practically been repeated in the last year, except in the second quarter, when it dropped to 5.6%
For the preparation of the study, idealistic Divide the average sale price offered by the rental price requested by owners in the different markets. The result obtained is the gross percentage of profitability provided to an owner by renting his home.
