RENTAL YIELD IN SPAIN IN 2024-2025: LEADERS, TRENDS AND OPPORTUNITIES

Spain’s rental market has seen steady growth throughout the year. The national average yield reached 6.7% in 2024, up 0.3 points from 2023. This increase is mainly due to a 14% rise in rental prices, which outpaced the 8.4% increase in property purchase prices. This imbalance has made renting a more attractive investment option compared to property purchasing.

Ranking by autonomous communities
Catalonia and the Region of Murcia lead the ranking with a yield of 7.6%, followed by the Valencian Community at 7.3%. At the other end, the Balearic Islands show the lowest return with 4.6%, driven by high acquisition costs. Despite being a dynamic market, Madrid remains slightly below the national average at 5.8%, weighed down by high purchase prices that reduce profitability.

Factors explaining regional differences
The imbalance between supply and demand is the main driver behind the rise in yields. Regions under demographic or tourism pressure, such as Catalonia and the Valencian Community, show stronger returns. Other influential factors include local regulations, the ability to attract foreign investment, and the uneven application of housing laws, all of which shape how each market evolves.

Forecast for the end of 2025
The national average rental yield is expected to reach 7.1% by the end of 2025. Mediterranean communities could exceed 8%, while Madrid may narrow the gap due to increased housing supply. The Balearic Islands may improve slightly but are expected to remain at the bottom. Interest rate cuts will be key and could temper rental price growth in the second half of the year.

Strategic keys for real estate investors
Investors should focus on high-yield regions and secondary cities with more accessible prices. In lower-yield areas like Madrid or the Balearics, the strategy should target specific property types, such as student rentals. Anticipating regulatory changes and planning medium-term investments will be crucial, as the current conditions offer a clear window of opportunity to enter the market.