The three largest Spanish cities have seen rents rise to record levels over the past year, bringing attractive yields for overseas property investors.
The actual property prices in Spain still have a fair way to go in order to reach the peak values seen in 2008 before the worldwide financial crisis knocked up to half the value of spanish properties.
However, rents in the main Spanish cities of Madrid, Barcelona and Valencia suffered far less during the financial crash, and strong rental growth has now seen rent levels now reach a record high in these three Spanish cities.
Property portal Idealista have calculated that the average rental price per square metre across Spain has risen by 15.9 per cent over the past year to 8.20 euros per month.
Rental rises in the main Spanish cities of Madrid and Barcelona were similar to the national average at 15.6 per cent and 16.5 per cent respectively. However Spain’s third city of Valencia enjoyed even stronger growth at 20.3 per cent.
Despite this strong growth, Valencia rents still lag way behind the other two, showing ample room for further growth.
Average monthly rental costs per square metre in Barcelona are highest at 17.9 euros, more than double the average cost of 7.2 euros in Valencia. Madrid also lags behind its Catalan rival at 14.40 euros.
As always with property investment, location is key. The strong Spanish rental rises have not bee seen everywhere, with rental prices falling in some Spanish cities such as Tarragona, Zamora and Jaén, while other regions such as Extremadura, Murcia and Castilla-La Mancha have only seen a rental rise of about 2.5 per cent.
With property prices still a fair way below their 2008 peak, the high rental returns available in the big three mean that attractive yields can be achieved by overseas property investors looking to invest in the three main Spanish cities.