The profitability of housing is actually increasing.

The profitability of housing is actually increasing.

The projections of companies like BBVA Research suggest that by the end of 2017 the total sales of homes in Spain will have grown a 10% comparing to the previous year and a half a million properties will be sold. In fact, according to the National Statistics Institute, about 200.000 were sold in the first five months of this year.

The BBVA explains that among the reasons that will increase sales are; the increase in job creation, the greater optimism in households about the future evolution of the economy, low interest rates and growing foreign demand. They add that the weakness of the English demand has been compensated with more dynamism of other nationalities such as French, Italian, German and Belgian.

One of the last reports published by the bank projected an increase, during the whole year close to 3%, half a point higher than the expected for that date, as a result of a growth in demand.

The document pointed out that although this scenario can not be compared to the real estate boom and prices are below what they were a decade ago, difficult times have allowed Spanish people to break with some myths such as "the price of housing never falls" or that "a house should never be sold below the purchase price". The way of thinking of buyers has changed and they have understood that renting is a profitable option to generate incomes.

In fact, in the second quarter of 2017, the return offered by investing in a house to be rented increased to 7.3% according to a study carried out by the website specialized in the real estate sector, Idealista. The figure exceeds by two percentage points last year's profitability (5.5%), as a result of the strengthening in the demand for rentals in Spain.

Las Palmas de Gran Canaria is the most profitable Spanish capital in terms of the housing sector with 8%, followed by Lleida, Huelva and Alicante. On the contrary, the lowest returns are obtained by the owners of houses and flats in San Sebastián, Ourense and A Coruña.

In general, it is important to know that the price of homes in Europe continues rising from the lows reached between 2012 and 2013. Since leaving the negative in the second half of 2014, the values of homes have grown moderately to reach a average of 4% in the EU as a whole and of 3.8% in the euro area since the end of 2015.

Commercial premises, offices and garages: 
The investigation of this portal also revealed that commercial premises still remain the most convenient investment, since acquiring a place and renting it offers a gross return of 8.2%, especially in areas such as Córdoba and Zaragoza. Palencia, on the other hand, offers the places with less attractive for the investor, followed by Castellón and Jaén.

They are followed in the market by offices with a yield of 7.5%. Especially in Malaga the offices present the highest return, as well as Zaragoza, Córdoba and Palma de Mallorca. In Madrid, the profitability rises to 6.3%, while in Barcelona it drops to 6%.

Housing, premises and offices registered an important growth with respect to 2016, however, the profitability of the garages has remained the same during this year. However, the best investments are obtained in Las Palmas de Gran Canaria (8.4%), followed by Murcia, Girona and Santa Cruz de Tenerife.
The capital with the least profitable garages according to the study is Salamanca, with 2.3%, followed by Barcelona (2.6%) and Coruña. Madrid registered 3% and Vitoria and Granada 3.1% respectively.

For the elaboration of the study, Idealista divided the average selling price offered between the rental price requested by the owners in the different markets referring to the quarterly indexes of these products. The result obtained is the gross percentage of profitability that provides an owner to rent their home.
The website explains that this data facilitates the owner to analyze the current state of the market and is a basic starting point for all those investors who want to buy real estate assets in order to obtain benefits.

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