Gross rental yields in Spain have returned to normal

Residential Valuation Specialist | August 14, 2018

Last Updated: Aug. 14, 2018
BARCELONA - Ciutat Vella apartments COST (€) YIELD (p.a.) PRICE/SQ.M. (€)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
50 sq. m. 240,550 1,028 5.13% 4,811 20.55
120 sq. m. 597,360 1,991 4.00% 4,978 16.59
BARCELONA - Eixample apartments
50 sq. m. 284,550 1,092 4.61% 5,691 21.84
120 sq. m. 629,280 1,933 3.69% 5,244 16.11
BARCELONA - Gracia apartments
50 sq. m. 236,700 1,001 5.07% 4,734 20.02
120 sq. m. 518,640 1,729 4.00% 4,322 14.41
BARCELONA - Les Corts apartments
50 sq. m. 253,500 995 4.71% 5,070 19.89
120 sq. m. 534,360 1,858 4.17% 4,453 15.48
BARCELONA - Sarria-Sant Gervasi apartments
50 sq. m. 280,200 1,101 4.72% 5,604 22.02
120 sq. m. 718,680 2,357 3.94% 5,989 19.64
MADRID - Centro apartments
50 sq. m. 264,400 1,063 4.82% 5,288 21.26
120 sq. m. 627,960 2,057 3.93% 5,233 17.14
MADRID - Chamartin apartments
50 sq. m. 294,550 958 3.90% 5,891 19.16
120 sq. m. 574,680 1,958 4.09% 4,789 16.32
MADRID - Chamberi apartments
50 sq. m. 284,450 989 4.17% 5,689 19.77
120 sq. m. 650,520 2,094 3.86% 5,421 17.45
MADRID - Retiro apartments
50 sq. m. 286,350 1,062 4.45% 5,727 21.24
120 sq. m. 557,280 1,796 3.87% 4,644 14.97
MADRID - Salamanca apartments
50 sq. m. 312,500 1,115 4.28% 6,250 22.30
120 sq. m. 674,160 2,215 3.94% 5,618 18.46
MADRID SUBURBS - Las Rozas apartments
100 sq. m. 312,000 1,179 4.53% 3,120 11.79
MADRID SUBURBS - Majadahonda apartments
150 sq. m. 516,000 1,899 4.42% 3,440 12.66
MADRID SUBURBS - Pozuelo de Alarcon apartments
200 sq. m. 765,000 2,586 4.06% 3,825 12.93
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you´ll really earn) are typically around 1.5% to 2% lower.
Source: Global Property Guide Definitions: Data FAQ See also: Update Schedule

Gross rental yields on apartments in Barcelona´s Ciutat Vella - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - range from 4.00% to 5.15%. Similar yields, or maybe slightly lower, can also be had in Madrid. Not great, though not untypical for cities like Madrid and Barcelona. Yields on the very smallest apartments now offer reasonable returns. But then smaller apartments tend to need more maintenance, so a higher yield is justified.

Prices of apartments. Prices per square metre (sq. m.) of apartments in Barcelona range from around EUR 4,300 to EUR 6,000, or around EUR 225,000-300,000 for a 50 sq. m. apartment. In the heart of Madrid, i.e., Chamartín, Chamberí, Retiro and Salamanca, prices per sq. m. range from around EUR 4,700 to EUR 5,900, or around EUR 265,000 to 290,000 for a 50 sq. m. apartment. There´s very little price-difference between the two cities, and for all practical purposes costs are around the same.

In nearby upscale suburbs of Madrid such as Las Rozas, Majadahonda and Pozuelo de Alarcón, apartments are cheaper, with prices per sq. m. ranging from around EUR 3,100 to EUR 3,800.

Rents of apartments. Rents are similar in the two cities, maybe slightly lower in Madrid, so that 50 sq. m. apartments will cost around 950-1,100 euros per month, while 120 sq. m. apartments will cost around 1,750-2,500 euros a month.

Conclusion: All these yields figures are higher than last year, which was higher than the previous year. Spain is once again beginning to look a possible investment destination.

When buying property, take into consideration that round-trip transaction costs are moderate to high in Spain. See our Property transaction costs analysis in Spain and Residential property transaction costs in Spain, compared to the rest of Europe.