The Spanish economy continues with many shadows and does not finish accelerating in the recovery . Some data reflect this, such as the increase in the debt and the deficit, or the large number of unemployed.
Brussels has shown its concern, the IMF also, and not least is the Bank of Spain, which has just worsened its economic forecasts for this year.
The fall in house prices has slowed down in a general way But within these foci of darkness, there is room for some light. One of the areas of economic activity that is reflecting clarity in its figures is that of housing , which was precisely the most punished in the crisis , mainly because of the irrational rise in prices and the massive concession of mortgages, some of them of subprime denomination -given to people with doubtful solvency-.
The reality is that the fall in home prices has slowed down in a general way, and in fact has started to rise in some areas . Housing for rent is once again an investment asset with profitability. And not only that.
According to the latest data from the Bank of Spain on alternative investments, they place it as the best option . According to the agency, in 2015 the profitability of the house itself (sum of the rent plus the variation in price) reached 8.85%, marking the historical maximum in the series recorded. Gross rental income stood at 4.6%.
There are real estate portals such as idealista.com and fotocasa.com that set this percentage above 5% based on the records of the millions of individuals that advertise their homes.
The difference is substantial compared to the more classic investments such as 10-year government bonds or deposits between 1 and 2 years, which last year offered an average gain of 1.8% and 0.5%, respectively.
In parallel, the stock market had the worst result since 2013 with a drop in the Ibex slightly above 7%.
The best provinces to own
And which are the provinces that are giving greater surplus value to the owners of the properties that rent them? According to idealista.com, Lleida stood out with 7.9% in 2015.
Lleida is the province in which it is more profitable compared to Orense, which is where fewer benefits were provided. Las Palmas de Gran Canaria (6.4%) was located behind; Palma de Mallorca (6.2%); Alicante (6%) and Huelva (5.9%). In Barcelona it was 5.4%, compared to 5.3% in Madrid.
Lower benefits provided houses in Ourense (3.4%); San Sebastián (3.6%); A Coruña (3.6%) and Lugo (3.8%). In any case, nothing despicable considering that they exceeded in 2015 the most conservative assets .
Not only the rental housing was attractive for the investor. According to idealista.com the commercial premises continue being the most profitable , since they registered a gross profit of 7.3%, against 6.9% of the previous year.
Meanwhile, the garages increased the surplus value to 4.4%, and the offices placed it at 6.6%. This trend has been prolonged in the first months of 2016. According to a study carried out by idealista.com and published at the beginning of April, the price of rental housing increased by 4.3% in the first quarter.
Fernando Encinar, head of studies of the portal states that “with the data of the report in hand it is clear that there is a huge demand for rental housing , and that the offer is rising strongly.”
“We have found that in certain markets, mainly large capitals, the pressure of demand is so strong that the ads last hours in our database, ” he adds. The records of the Association for the Promotion of Rent and Access to Housing (Arrenta) run in the same terms.
But there is an added problem that is influencing the market considerably. Arrenta has begun to detect in recent weeks that the demand for rent is outstripping the offer, which is “stagnating” due to political uncertainty and the measures of some municipalities such as Barcelona, which has urged the Government and the Generalitat to limit the maximum rental price of private homes in Barcelona, so it is “urgent” that the new Executive stimulate the exit of empty houses for this purpose.
There is a huge demand for rental housing and the supply is rising strongly The sixth edition of the survey Experience of housing rental of Spaniards in 2015 by Fotocasa, also shows the dynamism of this market, since 91% of the Owners who put their apartment for rent got it, and in an average time of only four months.
“Six out of every 10 owners who achieved it did not lower the initial price of supply , it is one more indicator that this market is stabilizing as a result of the growing demand and the change of mentality of the Spanish in favor of rent,” explains Beatriz Toribio, responsible for studies.
In 2015 prices rebounded 3.6% in the case of rental housing, which was the first positive figure since 2007. Until last year, depreciation was around 30% on average in our country.
For those who are interested in acquiring a home as an investment, they will also find themselves with a substantial improvement in the situation , with exceptional conditions for mortgages.
Banks have turned the tap on financing, although it is true that the requirements for the claimant are much more demanding. But the cost to acquire a property is at this moment in historical lows , with a Euribor to 12 months, the most used for the calculation of mortgages in Spain, in negative.
In parallel, the interest that is applied along with the Euribor has fallen to unknown levels, below 4% and 5% a few years ago. Even fixed-rate mortgages are reducing their interest as a consequence of a monetary policy in Europe that has left the cost of money at 0%.
Option for all
In contrast to the more traditional way of obtaining financing, new formulas such as crowdfunding have emerged. This activity, which was regulated by law last year, allows people to invest in projects, initiatives or tangible assets in exchange for the achievement of capital gains.
In this way the two parties win, who invests and who receives the money to execute their project. Housers is one of the first real estate crowdfunding platforms available in Spain.
It has registered almost 8,000 users and has made an investment of more than 3.6 million euros with only four months of activity. The entity allows to make deposits from 100 euros, and in return it gives benefits for the rent and the sale of the real estate.
According to calculations of the platform, they are offering a rental return of around 7.5%, and about 35% in five years with respect to the revaluation of the property.
According to CBRE’s Global Inverstors Intentions report, which includes Housers on its website, Spain ranks as the third most attractive country to invest in real estate assets for 2016, behind Germany and the United Kingdom.
37% of the respondents to the study said that the main reason for doing so is in the profitability they expect to obtain in addition to the possibility it presents to diversify the portfolios. T he taxation is another important aspect also when leasing. The reform has brought some news that must be taken into account before making any decision.
The deductions for rental of housing have been eliminated for contracts signed since January 1, 2015 and those corresponding to the owner have been reduced .
However, there are differences between Autonomous Communities. If you are not clear how to enter this investment option know that there are specialized agencies for this and that some cities like Madrid have a free service to intermediate between the owner and future tenants through the city.
Some of the services consist of advice and establishing guarantees for both parties .