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The gross profitability of investment in housing for the rental market has experienced a slight decrease during the first quarter of this year, standing at 7.1%, compared to the 7.2% it offered at the close of 2022. This is revealed by a study carried out by idealista, which highlights that, despite this decrease, the profitability obtained is still considerably higher than the rates offered by 10-year Government Bonds, which stand at 3.2%.

The idealista study uses data on sales and rental prices of various types of real estate properties to calculate their gross profitability. According to the results, offices remain the most profitable real estate investment option in Spain. Buying an office to rent offers a gross yield of 13.1%, up from 11% 12 months ago. On the other hand, commercial premises offer a yield of 9.7%, compared to 9.4% last year. For garages, the gross yield stands at 7.1%, compared with 6.3% in March 2022.

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Housing profitability

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Continuing with the analysis of the profitability of housing in different Spanish cities, it can be seen that Lleida is the city that offers the highest profitability, reaching 8.3%. It is closely followed by Jaén and Murcia, both with a gross profitability of 7.8%. Other cities with yields above 7% are Huelva, with 7.5%, and Teruel, with 7.2%. Almería and Castellón have gross yields of 7%.

On the other hand, the cities with the lowest yields are San Sebastián, with 3.6%, followed by A Coruña and Palma, both with 4.7%. Pamplona and Pontevedra share a percentage of 4.8%. In Madrid, profitability reaches 4.9%, while in Barcelona it is as high as 5.4%.

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Profitability of premises

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With respect to the profitability of commercial premises in different Spanish cities, it can be seen that they are the product that offers the highest profitability in most of the capitals. The city with the highest return is Huelva, with 12%, followed by Santander with 10.9%, and Murcia and Lleida with 10.7% in both cases. Other cities with returns above 10% are Girona, with 10.4%, and Ávila and Lugo, with 10.2% in both cities. Bilbao and Valencia also have yields of 10.1% in both cases. In Barcelona and Madrid, the rates are 8.2% in both capitals.

On the other hand, Cuenca is the city with the lowest profitability in commercial premises, with 5.9%. At the bottom of the table are also Toledo, with 7%, and Jaén, with 7.2%.

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Office profitability

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The profitability of offices also shows significant variations between different Spanish capitals. According to the data, Seville is the city that offers the highest return, with a 16.2% gross return on office space. It is followed by Albacete, with 11.2%, Zaragoza with 11%, and Almería with 10.9%. In Barcelona, the return is 7.9%.

On the opposite side, we find cities such as Bilbao, with 6% profitability in offices, Santa Cruz de Tenerife with 6.4%, Salamanca with 6.5%, and Ourense and Palencia with 6.6% in both cases. In Madrid, office profitability stands at 6.7%.

It is important to bear in mind that the office market may be less uniform than other real estate products, which makes it difficult to obtain statistical data for all Spanish capitals.

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Profitability of garages

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In general, garages are considered the least profitable product for investors in many Spanish capitals. According to the data, Murcia offers the highest return on garages, with 10.2%, followed by Castellón with 8.7%, Ávila with 7.5% and Lleida with 7.2%. In Madrid, the rate of return stands at 5.1%, and in Barcelona it is as high as 6.3%.

On the other hand, Salamanca is the capital with the least profitable garages, with only 2.9% profitability, followed by Ourense with 3%, and Santander and Palencia with 3.4% in both cases.

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Methodology

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Idealista's study uses a methodology that divides the offered sale price by the rental price requested by owners in different markets, such as homes, premises, garages and offices, to calculate the gross percentage of profitability. This data provides an overview of the current state of the real estate market and can be used as a starting point for investors who are interested in buying real estate assets with the aim of making a profit.