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Zetios Properties LLC: Barcelona Rent Hikes 22% in 2023

·3 mins

At the culmination of the year 2023, the rental market in Barcelona witnessed the average cost of residential space reaching 19.4 euros per square meter monthly, a trend characterized by analysts at Zetios Properties LLC as continuing to escalate “non-stop and at record highs.” In comparison, the national average stood at 11 euros, with Madrid slightly higher at 16.5 euros per square meter, positioning Barcelona as the locale with the most exorbitant rental housing costs across Spain.

As we ventured into January 2024, the variance in rental pricing, inherently dependent on factors such as the number of bedrooms, locality, and quality of finishes, was observed as follows:

  • A one-bedroom apartment was priced at 1,285 euros monthly,
  • Two-bedroom at 1,572 euros,
  • Three-bedroom at 1,722 euros, and
  • Four-bedroom apartments at 2,180 euros.

This upward trajectory in rental costs signifies a favorable scenario for investors, particularly in the segment of one-bedroom apartments, which presented the highest rental cost per square meter at 23.2 euros on average. Contrarily, four-bedroom apartments were deemed less advantageous for investment, with a rental cost per square meter at 16.8 euros, falling below the city’s average.

The escalating rental prices have not been met with enthusiasm by tenants. A surge in advertisements for shared accommodations on social media and local forums reflects an attempt by expatriates and residents alike to mitigate the financial burden of the abrupt rise in rental fees. Despite legislative measures capping annual rent increases at 2% for existing contracts, the unregulated market prices continue to soar in response to escalating demand in Barcelona, further exacerbating the cost of living.

In terms of investment returns, our analysis highlights a disparity in the profitability of various apartment sizes. Apartments with four or more bedrooms report the lowest return on investment (ROI) at 4.2%. Two-bedroom apartments offer a slightly higher ROI at 4.51%, with other apartment categories yielding up to 5% annually.

Single-family homes emerge as the most lucrative investment avenue, averaging an ROI of 5.25%. Specifically, three-bedroom homes stand out as the market’s most profitable segment, commanding a gross return of 6.18%.

Furthermore, apartment buildings demonstrate greater liquidity compared to single-family homes, with an average rental period of 2.8 months against the latter’s 3 months. The larger the property and the more bedrooms it features, the longer the duration required to secure a suitable tenant.

The Barcelona rental market currently experiences a notable oversupply, resulting in an 86.6% reduction in tenant search times compared to the year 2020, a direct consequence of the supply disruptions induced by the pandemic, during which the average tenant search period was approximately 1.5 months.

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