Barcelona rental yields are among the best property investments in Spain – but the devil is in the details.
Not all Barcelona rental yields will beat sky-high inflation (10.8% in July) this 2022.
Depending on your property investment and location, some rental yields will not beat the interest on Spanish government bonds.
In this article, we look briefly at the Barcelona property market in 2022, and then bring in the data from four leading sources of rental yield insights in Barcelona.
We’ll also cover the most lucrative locations and types of Barcelona property investments.
Ready?
Let’s jump in.
Is Barcelona a good place to invest in property?
There’s a lot that’s positive about the Spanish and Barcelona property markets in 2022.
Here’s a quick overview:
- Property transactions. The first half of 2022 saw the most property transactions (331,000) since the record-breaking year of 2007.
- Breaking records. Top analysts – like the research director at leading property portal Fotocasa – believe the second-half of 2022 will see it overtake 2007.
- Startup hub. Barcelona has ranked as the 3rd most attractive European city to establish a startup this year, after only London and Berlin.
- Sports. Barcelona will host the 2024 America’s Cup, increasing demand for short and mid-term rental apartments over the next few years.
- International investment. Warren Buffet’s property investment group (Berkshire Hathaway HomeServices Spain) increased its Barcelona portfolio by 20% in August.
- Offices. Barcelona broke its own record to rent out 182,200 m2 of office space – a 16% increase.
- Overall investment. Barcelona received €2 billion in property investments in the first half of 2022 – a 23% increase on 2021 and nearly half a billion more than the previous record set in 2007.
A massive 96% of property investments entered the 22@ tech hub in Poblenou. The region houses many of Barcelona’s unicorn companies – e.g. Glovo – and is the location for European hubs of companies like Meta, Microsoft, Orange, GSK, Mediapro, Isdin, Indra and more.
In terms of rental prices, these have hit new records in Barcelona this 2022. The city is now the most expensive place to live in Spain. Rental prices shot up 18% year-on-year last July, while the supply of apartments fell 59%.
July in 2022 also recorded a 19.2% year-on-year increase in housing prices in Barcelona.
It’s clear the Barcelona property market is recovering with renewed strength following the COVID-19 pandemic.
As we explain in our blog 5 reasons to invest in Barcelona property in 2022, everything points towards a record-breaking end of 2022.
However, inflation over 10% in July, interest rate hikes in Spain and a general cost of living crisis are the key factors that could keep records just out of reach.
Barcelona rental yield in 2022
We consulted four sources to find 2022 data on Barcelona rental yields:
- Banco de España – Quarterly report from Spain’s central bank
- Idealista – Monthly report from Spain’s leading property portal
- Fotocasa – Monthly report from Spain’s number 2 property portal
- Deloitte – Annual Overview of European Residential Markets report & collaborative data
Here’s what we found out.
Across all four sources, Barcelona rental yields fall into a range between 2 to 8.5%.
Let’s go over each in turn.
Banco de España
The August 2022 report Indicadores del Mercado Inmobiliario put average rental yields in Spain at 3.7%.
This was the average for 2021, and is a slight decrease from 3.8% rental yields in 2019.
The Bank of Spain also gives figures for rental yields added onto the rise in property prices – this hit 10% in 2021, up from 5.2% in 2020 and 7.4% in 2019.
While these figures are nationwide they’re a good platform for our remaining data.
Idealista
Idealista’s report on rental yields was more positive than the Bank of Spain.
The leading online property portal put average rental yields across Spain at 7.2% in June of 2022. Crucially, the August 2022 report from the Banco de España did not include rental yield figures for Q1 and Q2 this year.
Idealista reported this was a slight gain on 7.1% rental yields recorded in June last year.
Barcelona rental yields were shown as high as 8.5% depending on the type of property investment – see How to hit the highest Barcelona rental yields in 2022 below.
Fotocasa
Fotocasa carries an online calculator for rental yields in Spain.
The page put rental yields in Spain at 6.5% in 2021, according to data within Fotocasa’s extensive database.
An in-house Fotocasa report said the region of Catalunya offered rental yields at 6.6%, while Barcelona city offered 6.1% rental returns in 2021.
Deloitte
Deloitte brought the most detailed data on Barcelona rental yields to the table.
The 2022 Overview of European Residential Markets placed Barcelona as the 6th most expensive city in Europe to rent. Barcelona had jumped three places since the 2021 report and Deloitte said it was the city to record the ‘biggest annual change in rental housing prices’ with a 27.54% increase.
The report didn’t explain why property prices have increased so much in Barcelona – but inflation figures also confirm that property prices shot up 33.1% year-on-year across Spain at the end of Q1 in 2022, just as COVID-19 restrictions were relaxed.
Only Paris, Oslo, London, Amsterdam and Trondheim were more expensive to rent.
In a collaborative report with API in Catalonia, Deloitte placed Barcelona rental yields between 2 to 6.5%.
The range depended on which district investors had rental properties – see How to hit the highest Barcelona rental yields in 2022 below.
What is a good rental yield in Spain?
Inflation hit 10.8% in Spain according to July CPI data.
Using this as a benchmark, very few property investments will be able to beat inflation in Spain this 2022 until inflation subsides.
However, rental yields still offer some of the best returns on investment in Spain.
The Spanish Bolsa fell -8.2% in Q2 of 2022. Interest rate hikes have increased the returns on 10-year governments, but only to 2.6% in Q2 of 2022.
Against this economic backdrop, Barcelona rental yields are promising.
The Fotocasa report ranked rental yields in Spain’s 17 autonomous communities in 2021 as follows:
- Región de Murcia (7,5%)
- Navarra (7,3%)
- Comunitat Valenciana (7,3%)
- Catalunya (6.6%)
- Canarias (6,5%)
- Aragón (6,4%)
- Castilla-La Mancha (6,3%)
- Asturias (6,2%)
- Cantabria (6,1%)
- Castilla y León (6,1%)
- Andalucía (6,0%)
- La Rioja (6,0%)
- Extremadura (5,8%)
- País Vasco (5,5%)
- Galicia (5,5%)
- Madrid (5,2%)
- Baleares (5,0%)
Rental yields were high across Catalonia – this is largely thanks to a booming market in the interior regional capital of Lleida were property yields are as high as 8.8%.
Lleida is home to leading universities, a science park and is a centre for agriculture. Up until recently, house prices were extremely cheap in Lleida and with a reduced supply and sudden demand the rental prices are rising faster than most other cities in Spain.
How to hit the highest Barcelona rental yields in 2022
While Barcelona rental prices are breaking records in 2022, property prices in Barcelona are also sky-high.
The Deloitte 2022 market report said that Barcelona properties sold for 238.95% higher than the national average. This was higher than Madrid at 193.92% and the biggest variation in Europe after Paris in France and Lisbon in Portugal.
It means you will need to pay more to begin earning Barcelona rental yields.
It also means you’ll want to know about the costs of buying property in Barcelona. In our 12-step guide on buying a house in Barcelona we cover these taxes and costs. These include:
- If you’re not an EU/EEA citizen you will need to pay 24% income tax on rent, compared to 19% if you’re from the EU or have Spanish residency. Read more in our blog on foreigners buying a property in Barcelona.
- You’ll pay wealth tax if your property or net worth is over €500,000.
- Property tax in Barcelona – between 0.66-0.8% of the property’s rateable value. See our guide to calculating property tax in Barcelona here.
- If you rent out a Barcelona property with long-term contracts, you can get an income tax exemption on up to 60% of the annual rent generated.
Best neighbourhoods in Barcelona for rental yields
According to Fotocasa, the best neighbourhoods in Barcelona were Provençals del Poblenou (Poblenou district) and El Raval (Ciutat Vella district) with a 5.7% rental yield.
These were followed by the 22@ tech hub and the El Parc i la Llacuna del Poblenou (5.5%), La Bordeta (5.4%), Sants-Badal (5.2%), La Sagrera (5.1%), El Poble Sec-Parc de Montjuïc (4.9%), Sant Andreu del Palomar (4.9%), Navas (4.9%) and El Guinardó (4.8%).
According to Deloitte, the neighbourhoods of Besòs and La Trinitat offered rental yields well over 6% in Barcelona.
According to Miguel Ochoa – a Deloitte director of financial advice – property investors found neighbourhoods outside the city centre (such as those above) as ‘riskier’ and hence asked for higher returns.
Compare the above Barcelona rental yields with around 3% returns in Pedralbes, Barcelona’s most expensive neighbourhood in the district of Les Corts. The Deloitte report also said rental yields in Eixample were around 3%.
Best property types in Barcelona for rental yields
According to Idealista, the most lucrative property type for Barcelona rental yields were commercial premises.
The national average in Spain was a return of 11.2%.
In Barcelona, commercial premises offered a rental yield of 8.5%. The high rental yields were followed by a 6.6% return on investments into office space in Barcelona. Garages and warehouses offered a return of 6.3% in Barcelona while residential rents offered yields of 4.9%.
Clearly, offices and commercial premises offer the best rental yields in Barcelona.
Unsurprisingly, the 22@ tech hub within El Parc i la Llacuna del Poblenou makes it one of the best neighbourhoods for any property investment. This neighbourhood brought in 96% of all Barcelona property investments (€2 billion) in the first six months of 2022.
The 22@ hub is home to 175,000 m2 of the 182,200 m2 rented office space in Barcelona.
(You can see a list of commercial premises for sale in Barcelona with Lasose Properties & Investments at the bottom of this article.)
More Information
Lasose Properties & Investments is a leading real estate agency offering exclusive listings of properties for sale in Barcelona. We are experts in individual and corporate Barcelona relocations and offer tailored advice if you’re looking to invest in Barcelona property.
