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Residential Yields Reach 7% at the Height of the Pandemic

Investment in housing is gaining ground over other assets, such as the stock market and other equity products, with returns of between 7% and 8% in several Spanish provinces.

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With negative interest rates and the economic dampening effect of Covid 19, investment in housing is gaining followers. And it is no surprise, given that residential assets are currently offering an average gross return of 7%, compared to other types of investments, such as shares on the stock market and other equity products. Only gold exceeds housing in terms of returns since it has generated a yield of 23.7% over the last 7 months.

Seven months after the pandemic first began to have an impact on the European markets, the profitability of many financial products is zero, or even negative if we account for inflation. The return on 10-year US bond rates stands at 0.67%. The yield on Spanish bonds for the same period is 0.251%. In this way, in the fixed income market, both European and American high-yield bonds and the European corporate bond index remain in the red after seven months, as do equities. The Spanish stock market has been the worst-performing of the set of indices analysed since it has lost just over 32% of its value between the end of February and the end of September, and more than 50% of the value that it gained in 2015.

Read the full article in Spanish.

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