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This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
When you buy or sell property in Spain the sums of money are large, perhaps one of the biggest financial decisions of your life. The high transaction costs you will face like taxes and commissions only make the decision more important to get right. And when you own property in Spain you face a host of extra challenges to manage, and costs to control. Unfortunately, the Spanish property market is opaque and full of pitfalls, and notoriously unprofessional. Buying and selling property in Spain is not a decision to be taken lightly, and you may find it much easier to buy than sell if you don’t take care. In this market it is crucial to do your own research, and don’t rely exclusively on people who are trying to sell you something – let’s just say they might not have your best interests at heart. Spanish Property Insight is the only independent source of information and analysis of the Spanish property market. Don’t even think about buying or selling property in Spain without subscribing to Spanish Property Insight.
Ten years later, rental asking prices are now higher than their boomtime peaks in six regional capitals led by Barcelona. Given how crazy the Spanish property boom was, you have to wonder is this sustainable in those areas where rental asking prices are setting new records?
This research comes from the Spanish property portal Idealista.com, based on rental asking prices in their database, which is one of the biggest in Spain.
Idealista reveal that rental asking prices are now higher than they were at the top of the boom in six regional capitals where prices have risen fastest, in some cases at a dizzying rate.
Rental asking prices have set new records in Barcelona (+20% above the boom-time peak), Las Palmas de Gran Canaria (+16%), Palma de Mallorca (+14%), Madrid (+7%), San Sebastian in the Basque Country (+6%), and Girona in Catalonia, home to the Costa Brava (+3%).
Rental asking prices in all other regional capitals are still below their boomtime peaks, but in all cases have risen above the lows they plumbed in the depths of the crisis. In Malaga, capital of the eponymous province that is home to the Costa del Sol, rental asking prices are just a fraction below their boomtime highs, whilst in Alicante, surrounded by the Costa Blanca, prices are still 7% below the previous peak.
In Zaragoza, capital of the eponymous province and the regional of Aragon, rental asking prices are still 41% below the peak, which gives you an idea of how uneven the Spanish property market recovery is turning out to be.
Compared to the troughs of the crisis, rental asking prices in Barcelona are now 59% higher, followed by Palma de Mallorca (+48%), Madrid (+32%), Las Palmas de Gran Canaria (+30%) and Valencia city (+30%). In Murcia, however, they are just 5% higher.
Buying a rental investment in Barcelona in the depths of the crisis around 2012 would have been a very good investment. You would now be looking at a hefty rental yield, and be sitting on large capital gains. But are such high rents sustainable in a country where incomes have not risen by anywhere near the same level?
I guess rental increases will start to cool a bit, having risen so far and so fast, but I also don’t expect rents to fall anytime soon. Rising rents in hot markets like Barcelona, Las Palmas and Palma, are being driven as much by foreign and tourist demand as local demand, so the relationship to incomes is not so important. Is that a good thing? I’m not so sure, but it is what it is.
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