Popular wisdom states that in the past a good part of the savings were kept under the mattress. Currently, coupled with low interest rates (pending a change of course by the ECB), they leave little maneuvering for the traditional saver: put away where you put your savings, it is time to dust them off. And a safe option to invest them is the brick.
The real estate sector has surfed the wave of the crisis with flying colors and has not only been one of the driving forces behind the economic recovery, but has also positioned itself as a refuge value.
The attractiveness of real estate continues to arouse the interest of investors and individuals. And it is that, according to data from Fotocasa. In fact, compared to other assets such as State Bonds or bank deposits, housing has established itself as one of the financial products with the highest performance in recent years. In 2020, the profitability of housing reached the highest level of the decade, standing at 6.8%.
Despite the fact that, for the first time, gross profitability in general terms at the national level has fallen slightly -from 6.8% to 6.5%-, the maintenance of low interest rates added to the uncertainty caused by the pandemic have consolidated real estate assets as an attractive option for investors.
On the one hand, banks offer favorable financing conditions for the purchase of homes and, in this sense, the -mortgage reference index to calculate variable interest rates- has been negative since 2016. The index dismissed 2021 very close to historical lows, with -0.502 in December, making mortgage loans cheaper and generating a favorable scenario for the buyer.
On the other hand, another common denominator previously mentioned is added to this situation: . Surprising in recent months with the highest growth in several decades, inflation in Spain reached 6% last January. Faced with this scenario, investors and families seek shelter from the loss of purchasing power that this ghost entails, investing their savings in assets with a return that can neutralize its effect.
Given the modest performance of other financial products, investors are betting on the real estate sector in their pools and the purchase of housing stands as one of the largest shelters against inflation. In times of uncertainty, brick is positioned not only as a safe and profitable long-term investment, but also appreciates over time.
The purchase of housing as an investment has represented 9% of the total transactions
Precisely, in the last year, it has represented 9% of the total purchase transactions that have been carried out in Spain, thus standing at levels similar to the pre-pandemic era, when in 2019 a percentage of 10% was reached, according to the analysis Profile of the home buyer as an investment by Fotocasa Research.
Profitability, therefore, continues to be the key driver for putting the house up for rent. However, with the arrival of the instability caused by the coronavirus, the wait for the value of the home to increase and thus be able to sell it has gained weight. While in 2018 6% of Spaniards who bought as an investment wanted to wait for the market to improve to sell their home, in 2021 this percentage has doubled, standing at 12%.
Where to invest in Spain?
Very profitable areas can be found throughout Spain, highlighting the boom in markets outside areas considered prime, such as Madrid and Barcelona. For example, it highlights the speed with which the Region of Murcia has begun to present high levels of performance, ranking as the most profitable autonomous community in 2021 with a figure of 7.5%, followed by Navarra (7.3%), the Valencian Community (7.3%) and Catalonia (6.6%). However, for 10 years, there are very stable regions that have remained impassive in the face of changes and that continue to show great benefits, such as the communities of the Canary Islands (6.5%), Andalusia (6%) and the Balearic Islands (5%). %).
Although, since the impact of the pandemic, new sources have emerged such as Gandía in Valencia, which represents the city with the highest performance in 2021 with a figure of 9.6%. It is followed by Lleida (7.6%), Algeciras (7.5%), Roquetas de Mar (7.5%), San Cristóbal de la Laguna (7.5%), and Santa Lucía de Tirajana (7.4%). , Jerez de la Frontera (7.2%), Santa Cruz de Tenerife capital (7%), Cartagena (6.9%) and Manresa (6.8%).
And by neighborhoods?
Fotocasa’s analysis reveals that the most profitable way to buy a home and put it up for rent in Madrid is Numancia with a 7.6% return, followed by the southern areas of the capital such as San Diego, Puerta Bonita or Opañel, where the price of rents has risen in value in 2021. Regarding Barcelona, the neighborhoods with the highest performance at the moment are Provençals del Poblenou and El Raval with 5.7% both, but it is necessary to highlight that all, except La Barceloneta and Sants, They have increased their productivity compared to a year ago.
The garage, a fashionable asset
Although housing represents the main investment asset in Spain, the rise of garages has positioned itself as a very attractive alternative. Compared to other real estate assets, such as housing, investing in parking spaces is much more affordable and has a higher return. In fact, in 2021 the profitability of garages stood at 8.4%, compared to 6.5% for housing, according to the study The profitability of garages in Spain in 2021 by Fotocasa. And, precisely, the Region of Murcia is the community that presents the highest profitability both in garages and in housing.
Since 2015, the profit curve for garages has shown an upward trend, increasing from 5.8% to 8.4%. Likewise, in 2020 the performance of garages reached its highest point (9.3%), as demand pushed prices up and many small savers launched into this market driven by a context of uncertainty.
Whether or not investors follow trends, the market is in very profitable conditions for investing and, at this time, there is no safer financial product than real estate investment. So savers, get the money out from under the mattress.
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