The demand and profitability of properties to rent increases

Three out of ten Spaniards had a direct relation with the real estate sector in 2016, being the decision to rent more popular than of buying a property. This explains why 80% of the owners who decided to rent their house did it in a short period of time, a percentage which contrasts with the 33% of people who wanted to sell their house and did it – as claims the Radiografía del mercado de la vivienda en España 2016-2017 report by Fotocasa. This report confirms that Madrid and Catalonia concentrate most of the renting activity in Spain, representing a 43% of the whole activity in the country. What’s more, Madrid and Barcelona are the cities in which the prices are increasing the most, at a year-on-year rate of more than a 10% than the national average, making these markets the most dynamic and the ones with a higher percentage of success. In fact, buying a house to rent it later offers an annual return of a 4,4%, and, if you add the 12 months’ revaluation, this figure can reach an 8,8% – this percentage is the latest data given by the Bank of Spain, corresponding to the fourth quarter of 2016. Renting is becoming more popular because of a change in the mentality on the Spanish market. Its main reason is the crisis, but people are also starting to value the freedom and flexibility that renting gives tenants nowadays. This explains why three out of ten Spaniards do not think that renting is throwing money away. They also assume that many people will prefer renting than buying (39% of the interviewees think so). Regarding the option of buying a property, the report shows that a 7% of those who did not buy last year are willing to do so in the following two, a 12% are planning to buy in two-five years, and a 34% does not rule out to do so in the long term. The Spanish ‘buyer’ profile, in the short term, is usually around 43-years-old, lives with a partner and is from a middle-upper class. On the contrary, the younger generations think that buying is a good option in the long term – 18% of those thinking to buy in the future are 18-24-year-olds –, but are nowadays more attracted towards renting.