Buy a home to put it in rental market is now more profitable than it was 10 years ago, according to a study published by idealista, the real estate marketplace in southern Europe. In the third quarter of 2012, when the real estate crisis had not yet bottomed out, the gross return on housing stood at 5.3%, 1.8 points below the current 7.1%. Even so, if the comparison is made with the third quarter of 2017, a stagnation of returns is observed, with a slight reduction from 7.2% in the summer of 2017 to 7.1% in this quarter.
The vast majority of capitals now register rates of return higher than those of a decade ago. The greatest difference occurs in the city of Murcia, where it has grown from 5.4% to 8.8%. They are followed by increases in Huelva (from 4.8% to 7.7%), and Lugo (from 3.3% to 6.2%). Almería (from 4.3% to 7.1%), Cuenca (from 4.6% to 7.4%) and Castellón de la Plana (from 4.1% to 6.8%).
Most capitals register rates of return higher than those of a decade ago
In the large markets, on the other hand, the increases have been the most moderate in these 10 years: in Bilbao, it has gone from 4.3% to 5%; in Barcelona, from 4.5% to 5.2%, and in Malaga, from 4.8% to 5.7%. In Valencia, it has grown from 4.4% to 6.1%.
Even so, in two capitals (both large markets) profitability has fallen. In Palma, the return on investment was 4.8% in 2012 and in 2022 it has stood at 4.4%, while in Madrid, profitability stood at 5% and has dropped to 4.9 % current.
Profitability in the last five years has contracted
The number of cities that have lost profitability increases if we compare it with the data from September 2017. The greatest decreases have occurred in the island capitals of Palma (from 5.6% in 2017 to 4.4% today) and Las Palmas from Gran Canaria (from 7.2% to 6%). They are followed by Madrid, which has lost from 5.8% to 4.9%, San Sebastián (from 4.1% to 3.7%), Girona (from 5.9% to 5.6%), Málaga ( from 6% to 5.7%), Vitoria (from 5.3% to 5.1%) and Pamplona (from 4.7% to 4.6%).
Among the large cities, profitability has increased during this five-year period in Valencia (from 6% to 6.1%), Bilbao (from 4.8% to 5%) and Barcelona (from 4.7% to 5.2% ). The greatest increases in this period have occurred in Murcia (from 6.7% to 8.8%), Cuenca (from 5.5% to 7.4%) and Lugo (from 4.4% to 6.2% ).
Methodology
For the elaboration of this study, idealista has divided the sale price offered between the rental price requested by the owners in the different markets referring to the quarterly housing indices corresponding to the third quarter of 2012, 2017 and 2022 using the current methodology. from idealista, which evolved in 2019.
