The Spanish housing market remains highly fragmented. In the realm of homes, a few patterns emerge: major cities such as Madrid and Barcelona command higher prices, while many regions, sometimes called Empty Spain, show lower levels of activity. In recent years, sales and rental prices have climbed in the most dynamic provinces, rising above the levels seen before the 2008 housing crash.
Average rental profitability in Spain runs around 6.78 percent, a figure calculated by this publication using data from Idealista. As in other markets, the risk and return balance shifts; generally, the profit from buying to rent is greater in provinces where the market is slower to heat up.
There is a ceiling for rental prices, while sales can grow without a ceiling because financing keeps expanding. While it is rarely wise to generalize in real estate, markets with higher selling prices often show lower rental yields, such as in San Sebastian, Palma de Mallorca, or Barcelona, notes Francisco Iñareta, spokesperson for the portal.
Which provinces are the most profitable?
Cuenca stands out as the most profitable province for buying a home to rent. Idealista reports that a typical two-room apartment around 75 square meters costs about €58,575 and would rent for roughly €450 per month, yielding a gross annual return near 9.22 percent. Toledo and Ciudad Real follow closely, with gross returns of about 9.18 percent and 9.13 percent respectively.
Beyond this central area, Valencia ranks fourth with an average gross return of 8.83 percent, though there is a noticeable gap between the capital and other municipalities.
The share of provinces recording returns above 7 percent continues to grow. Regions like León (7.95 percent), Seville (7.81 percent), Badajoz (7.75 percent), Cantabria (7.66 percent), Burgos (7.63 percent), Granada (7.62 percent), Salamanca (7.59 percent), Soria (7.48 percent), Guadalajara (7.46 percent), Albacete (7.46 percent), Almería (7.38 percent), Córdoba (7.31 percent), Cáceres (7.30 percent), Zaragoza (7.23 percent), Lugo (7.19 percent), Asturias (7.13 percent), Las Palmas (7.12 percent), A Coruña (7.09 percent), Castellón (7.09 percent), and Barcelona (7.09 percent) are all posting healthy gross yields.
Which provinces are the least profitable?
The Balearic Islands (4.86 percent), Guipúzcoa (4.97 percent), Málaga (5.39 percent), and Madrid (5.8 percent) sit among the less profitable markets for rental activity in Spain. This tends to reflect their high economic dynamism and tourism draw. In the Balearics, price levels that prevailed during the bubble have still not fully normalized. Regions like Murcia (4.72 percent) and Álava (5.51 percent) also appear on the lower end of the spectrum.
Gross return does not equal net return
Profitability is linked to risk: higher risk usually brings higher returns, and lower risk tends to mean lower returns. Markets with tighter margins are typically safer, with properties selling more quickly and with more fluidity when demand shifts and vacancies arise.
Areas with higher monthly payments often provide greater confidence to investors when maintenance costs surface. Replacing a boiler in an apartment in Cuenca, where the tenant covers around €300 a month, differs from a similar job in Madrid where the cost can exceed €600 or €700 monthly.
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