The splendour of the letting market is becoming very noticeable, specially on the prices. They have definitely accelerated inValencia, Madrid and Barcelona. In Valencia, according to sources from the investment fund Balackstone, in a meeting with The Spanish Brick, the rental income has increased by 12% in 2016. Looking good in 2017
The market situation is as follow: need of housing but shortage of finance. Therefore, the rental market is improving and rental income start generating an interesting yield. Nevertheless, the challenge still be to find right tenants. Contact The Spanish Brick for more information
Mainly in the latter, where the average price of used house lettings has rocketed up to 11.85% in 2016 in annual rate, whilst it has increased a rather strong 6.26% in the capital. As a result, the average national increase respect to 2015 reached a 4.72%, according to the III Report on the Letting Market 2016, prepared by Tecnocasa and the Pompeu Fabra University (UPF) in Barcelona.
When these percentages are translated into euros, the average monthly price of the square metre in Barcelona has climbed up to €12.09, up to €11.20 in Madrid and up to €8.87 in Spain. “The difference (between the two largest cities) is broadening,” has been stated by Tecnocasa.
Other indicators that highlight the growth of this pattern according to the real estate agency are the period of house marketing, the final price respect to the offer, and the amount of visits the dwelling needs before being rented. The first of these factors demonstrates that currently a house for rent is rented in only 30 days, 11 days fewer than in 2013, which shows the high demand that exists.
In this sense, the amount of visits that a flat needed to be rented has been reduced to an average of 7.22 in 2016, a much lower figure to that registered in 2012 (8.44). Lastly, with these parameters it is not strange that the agreed final price is closer and closer to the price of the offer. “The power of negotiation of the tenant has been reduced. The final rent is only a 3% lower than the rent offer,” indicates Tecnocasa. In 2012, this reduction in the price was around 6%.
Finally, the real estate agency and the university in charge of this study describe the profiles of both lessor and lessee. On the side of the first, the increasing presence of pensioners (32%) points out. Moreover, 95% of landlords and landladies is of Spanish nationality and 65% of them are married.
Regarding the average lessee, they are identified as single people (58%), with an indefinite work contract (68%) and between 25 and 44 years-old (73%). Like the lessor, they are mainly Spanish (73%).