Southern Europe is leading the way in terms of interest in rental housing investment, with Spaniards ranking as the most interested among Europeans, followed by Portuguese and Italians. According to a study conducted by Masteos, a French company specializing in turnkey rental investment, the majority of savers in these three countries are keen on buying properties for rental purposes, surpassing their counterparts in Central Europe.
The study, which surveyed over 8,100 European citizens, found that Spain is the country where the highest proportion of individuals (72%) express interest in investing in rental housing. Portugal and Italy also show strong figures, with 67% and 64% of individuals respectively. In comparison, other economies in Europe fall below the 60% mark.
What sets southern European countries apart is their preference for real estate investments over other financial options such as savings accounts, stocks, or cryptocurrencies. Both Spain and Portugal favor real estate as the preferred investment choice, while the English and Dutch tend to opt for savings accounts. The study also highlights that even younger Spaniards view rental investment as a suitable and low-risk first investment.
Despite the interest in rental housing, not all surveyed individuals plan to invest in this market. Financial constraints are cited as the main reason, followed by a preference for investing in a home to live in. However, a significant percentage of individuals who do not plan to invest in rental housing still express interest in this type of investment.
In Spain, the average gross profitability of buying a property for rental purposes stood at 7.1% in the first quarter of the year, according to data from idealista. Different cities across the country offer varying yields, with Lleida being the most profitable at 8.3%, followed by Jaén and Murcia at 7.8% each. On the other end of the spectrum, San Sebastian ranks as the city with the lowest profitability at 3.6%.
Overall, rental housing investment in southern Europe, particularly in Spain, continues to attract interest as a profitable alternative amid low returns from traditional banking products and market volatility. The market shows potential for growth and could help address the ongoing rental housing supply issue in the region.
