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Zetios Properties LLC: 22% Rise in Barcelona Rents 2023

·3 mins

By the end of 2023, the average rental price in Barcelona had escalated to 19.4 euros per square meter per month, marking a continuous and unprecedented increase, as noted by Zetios Properties LLC analysts. This surge places Barcelona at the pinnacle of Spain’s rental market in terms of cost, significantly surpassing the national average of 11 euros and Madrid’s 16.5 euros per square meter.

Into January 2024, the rental costs varied widely depending on several factors including the number of bedrooms, location, and quality of finishes, detailed as follows:

  • Rent for a one-bedroom apartment averaged at 1,285 euros per month,
  • A two-bedroom at 1,572 euros,
  • A three-bedroom at 1,722 euros, and
  • A four-bedroom apartment at 2,180 euros per month.

This rising trend in rental prices presents an advantageous scenario for investors, especially in the one-bedroom apartment segment, which exhibits the highest rental price per square meter at an average of 23.2 euros. Conversely, apartments with four bedrooms offer lesser profitability, with the rental price per square meter at 16.8 euros, below the average for Barcelona.

The increase in rental prices has been unfavorably received by tenants. There is a notable rise in shared housing advertisements across social media and local platforms as both expatriates and local residents seek to economize in the face of steep rental hikes. Although the Spanish government has imposed a cap on rent increases at 2% annually for existing contracts, the free market’s dynamics allow for considerable price adjustments in response to growing demand in Barcelona.

Investment returns in Barcelona’s real estate sector exhibit a variance across different apartment sizes. The least profitable investments are in apartments with four or more bedrooms, yielding an ROI of 4.2%. Two-bedroom apartments fare slightly better with an ROI of 4.51%, while returns on other types of apartments can reach up to 5% annually.

Single-family homes present the highest investment returns, averaging an ROI of 5.25%. Among these, three-bedroom houses are particularly profitable, offering a gross return of 6.18%.

Apartment buildings demonstrate higher liquidity compared to single-family homes, with units typically renting out within 2.8 months as opposed to the 3 months average for houses. The process of finding tenants becomes progressively longer with the increase in the size and number of bedrooms in a property.

The current market in Barcelona shows a significant oversupply, leading to an 86.6% decrease in the time required to find tenants compared to the year 2020, a period significantly impacted by the pandemic, which had initially reduced the tenant search period to 1.5 months.

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