The average price of rental housing in Cataluña during the first quarter of 2020 reached 13.2 euros per square metre per month, with an average monthly payment per home of 1,350 euros. Meanwhile, in Barcelona, the average rental price significantly exceeded those figures, since the price per square metre there stood at 17.6 euros per month and the average monthly payment per home amounted to 1,595 euros, according to data from the Brains RE real estate big data platform.
Rental prices in both Cataluña and Barcelona recorded figures that are well above the national average, given that the average price of rental housing in Spain was 10.2 euros per square metre per month and the average monthly payment reached 1,098 euros. “This reveals that prices are at an all-time high despite the impact that the coronavirus crisis may be having on the sector,” explains Laura López, Data Scientist at Brains RE.
These prices represent a quarterly increase of 1.73% in the municipality of Barcelona and an interannual rise of 4.14% compared to the same quarter in 2019. “Over the last five years, prices have risen by 35% in the municipality, an almost identical growth rate to that recorded in Madrid (36%)”, indicates the Data Scientist.
Ciutat Vella, the most expensive district
Of the ten districts that make up Barcelona, Ciutat Vella registered the highest average price in the city during the first quarter of 2020, at 19.4 euros per square metre per month. However, it is also the district with the smallest homes in Barcelona – measuring less than 70 square metres on average.
It is followed by the Ensanche area, where the average rent stood at 18.4 euros per square metre per month; and then, San Martín where the price per square metre was 18.2 euros per month.
By contrast, the districts with the lowest average prices during the first quarter of the year -both below 14 euros per square metre per month – were Nou Barris, at 13.4 euros per square metre per month; and Horta & Guinardó, at 13.8 euros per square metre per month. The most central districts are still the most sought-after in Barcelona.
In terms of the average absolute rental cost, the most expensive district was Sarriá & San Gervasio, where the average rent during the first quarter amounted to 2,240 euros per month. It was followed by Les Corts where the average monthly rent reached 2,055 euros per month; and Ensanche at 1,673 euros per month.
At the opposite end of the spectrum, Nou Barris positioned itself as the district with the most affordable rental housing, with an average rental cost of 938 euros per month – the only district below 1,000 euros per month -, although it was also the district where the available supply was the smallest. It was followed by San Andrés, also with a limited supply, where rents cost an average of 1,019 euros per month, according to data from Brains RE.
Where are prices rising the fastest?
Over the last year, nine of Barcelona’s ten districts recorded positive rental price growth. San Andrés topped the list of neighbourhoods where rental prices have increased by the most, with growth of 7%. It was followed by Horta & Guinardó, with an increase of 6.1%, and Sants & Montjuic, with a rise of 5.8%.
By contrast, the most expensive districts were those with the lowest growth. Such was the case of San Martín, which registered a slight drop in rental prices of 0.6% compared to the previous year.
The supply of flats accounts for 98.5% of the market
Until March, the supply of flats for rent in Barcelona accounted for 98.5% of the homes on the market, whilst single-family homes accounted for just 1.5%. In this sense, single-family homes were the most expensive residential product and closed the quarter with an average monthly price of 4,512 euros, compared to 1,550 euros per month for multi-family homes. However, considering the average price in terms of surface area, the cost per square metre of multi-family housing is more expensive -17.7 euros per month- than that of single-family housing – 15.5 euros per month.
Within the supply of multi-family homes for rent, two-bedroom flats accounted for 31.5% of the total, followed by three-bedroom flats. In the case of single-family homes available for rent, they are located mostly in the Sarriá & San Gervasio district, and the majority of the existing supply comprises 4 bedrooms.
During the first quarter of the year, the average rental flat spanned a surface area of 88 square metres, whilst the average house measured 299 square metres. In the case of multi-family dwellings, they were slightly below the average surface area for Spain as a whole, which is 90 square metres.
One bedroom flats, the most expensive
In terms of the prices of the different types of properties during the first three months of 2020, the price of one-bedroom apartments in Barcelona amounted to 1,130 euros per month, which represents an average of 20.8 euros per square metre. On the other hand, two-bedroom apartments registered an average price of 1,413 euros per month, equivalent to 18.9 euros per square metre.
The average price of a three-bedroom apartment amounted to 1,639 euros per month or 16.8 euros per square metre. Finally, the average price of a four-bedroom apartment stood at 2,095 euros per month, equivalent to 16.1 euros per square metre, according to data from Brains Re.
As for the single-family homes for rent, two-bedroom houses registered an average price of 1,985 euros per month, equivalent to 17 euros per square metre. Three-bedroom houses cost an average of 2,119 euros per month, equivalent to 14.6 euros per square metre. While the average price of a four-bedroom house was 3,901 euros per month or 17.1 euros per square metre.
One bedroom flats, the most profitable
During the first quarter of 2020, in Spain, the gross yield of housing stood at 6.81% for multi-family homes and at 5.61% for single-family properties. Meanwhile, in the municipality of Barcelona, the gross yield of multi-family homes was 4.6% and 4.9% for single-family units. One-bedroom apartments were the most profitable properties on the market with a gross return of 5.32%. By contrast, large flats were the least profitable, with a gross return of 4.07% for four-bedroom homes.
By district, the most profitable one was Nou Barris, with an average yield of 6.5%. It was followed by San Andrés, Sants & Montjuic and Horta & Guinardó, all with a yield of 5.2%; they were also the districts with the lowest prices.
At the opposite end of the spectrum, the most expensive districts were those with the lowest yields, of between 3.5% and 4%; such was the case of Les Corts, Sarriá & Gervasio and Ensanche.
Nou Barris and San Andrés, where flats are rented the fastest
The average publication period – the amount of time that a property spends on the market until a tenant is found – for rental homes was 1.8 months in Spain and 1.6 months in Barcelona during the first quarter of the year, making Barcelona one of the most liquid cities in the country.
Multi-family homes were the most liquid product, since they were rented within 1.5 months on average, whereas single-family homes took an average of 2.2 months. “The bigger the house and the more bedrooms it has (and therefore the more expensive it is), the longer it takes to find a suitable tenant,” explains Laura López.
During the first quarter of the year, the most liquid districts within the municipality were Nou Barris and San Andrés, both with a rental publication period of 1 month. On the other hand, Sarriá & San Gervasio and Ensanche were the neighbourhoods where home rentals took the longest, with an average publication period of 1.9 and 1.7 months, respectively. “This shows once again that it takes longer to find a tenant for the more expensive properties whilst the most affordable ones stay on the market for the least time,” confirms the Data Scientist.
Structure of the rental market
12.3% of the properties on the market in Spain during the first three months of the year were rental homes, whilst properties for sale, which have longer publication periods, accounted for 87.7% of the market.
In Barcelona, the weight of rental properties over the total is higher than in the rest of Spain, as the city has one of the most active rental markets in the country. Rental homes registered a market share of 15% in Cataluña, whereas that figure rose to 42% for the municipality of Barcelona. Moreover, it is likely that it will increase further in the coming months with the transformation of many vacation homes into traditional rental properties as a result of the coronavirus crisis and the on-going mobility restrictions.
Within the municipal limits, Ciutat Vella and Gracia were the districts where the rental market had the greatest weight over the total housing market, with a market share of 50%. These and the other districts with the highest prices per capita, such as Sarriá & San Gervasio and Corts, were where the rental market accounted for the largest market share thanks to a much higher demand and turnover than in the districts located to the north of the city. “They are very attractive downtown districts for investors in the rental market due to their low risk, high and constant demand and strong growth in rents in recent years, which is why this type of product abounds,” says López.
By contrast, Nou Barris and San Andrés, where the rental market accounts for just 22%-24% of the existing supply, were the districts where the supply of rental housing was the lowest in absolute terms.
In terms of the management of rental assets in the market, we observe that there is a high degree of professionalisation at the national level, with 79.3% of properties in the hands of real estate agents. Barcelona has an even higher level of professionalisation, with 88% of the market in the hands of professionals and just 12% in the hands of individuals. On the contrary, Madrid has a lower degree of professionalisation with 76% of properties marketed by estate agents. In general, we see that in the large Spanish cities, there is still a wide range of properties being marketed by individuals, which could end up in the hands of real estate agents.
In the case of Barcelona, almost all of the districts have the same degree of professionalisation, ranging between 86% and 89%. The districts with the highest degree of professionalisation (89%) were Ensanche and Sarriá & San Gervasio. Those that registered a smaller percentage of properties in the hands of the professionals were Nou Barris (86%) and Gracia (87%).