The return on residential investment will range between 3% and 8% in 2023

The return on residential investment will range between 3% and 8% in 2023

Residential real estate investment maintains its profitability despite the slowdown in demand, according to forecasts by the Spanish section of the International Federation of Real Estate Professions (Fiabci), which predicts a return on residential investment of between 3% and 8% during 2023.

Fiabci explains that the areas with the lowest demand continue to be the most profitable due to their more competitive purchase prices, with yields of up to 8%. In prime areas, prices are high and stable due to the non-fluctuating demand, so prices will not fall no matter how high rents are.

On the other hand, the organization points out that the average price of housing in Spain is going to stabilise and even register a slight drop due to the decline in the purchasing power of demand. Salaries have not increased in proportion to inflation and the rise in the cost of living, which has reduced the financial capacity of citizens, who will have to pay less for the same flats.

Balance between demand and supply in 2023

In addition, Fiabci España foresees a balance between supply and demand which, linked to the rise in interest rates, will temper and clean up the market, avoiding the appearance of bubbles in some areas where the market for both buying and renting was already very tense.

According to the entity, this is a good time to buy and invest in the residential sector due to yields of up to 8%. In this sense, Anna Puigdevall, treasurer of Fiabci Spain, explains that "analysing the right time to buy a residence depends on the needs of each case and, above all, on the location. Although there are regions where it is very difficult to find what you are looking for, as we are at a time of lack of supply, those who prefer to wait risk missing out on buying opportunities that are unlikely to come back, so I advise buyers to negotiate instead of waiting".

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