Deposits are less profitable than ever … and Spanish property is consolidated as the great investment alternative. The rise that the yields of deposits over two years had experienced in March to 0.17% from the previous 0.09% has been a month’s bloom. According to the latest data from Banco España, in April the average yield of these products fell back to 0.11%. Therefore, the expected recovery of returns from historical minimum levels will have to wait.
Even more dramatic is the collapse of the interest rates applied to products between one and two years. In this case, average profitability fell in April to 0.07% from 0.11% in the previous month. It is the lowest level of the year and of all times. Therefore, conservative saving has to resign itself to losing purchasing power, since the consumer price index (CPI) shot up in May to 2% year-on-year, nine tenths above the rate registered in April.
The main reading of the latest data is that the entities that operate in Spain continue to adjust downwards the returns of some products that reach 771,500 million euros in the hands of Spanish households, a figure that remains close to historical highs. For many of them, investment in property is in the current situation a more attractive option or great investment alternative. Especially if you bear in mind that interest rates in the Eurozone will not begin to rise as soon as the second half of 2019.
Experts believe that the banks will not move any index until the macroeconomic scenario allows us to foresee with certainty when the era of 0% interest rates in the euro zone will end. The latest data on growth and inflation in the area have been below the forecasts of analysts. Therefore, expectations of increases in the price of money are cooled.
Without competition on the side of deposits (Spanish banks have stopped competing and only a small group of foreign entities offer higher than average rates), buying a home to rent offers much higher returns in an environment marked by the rise of rents throughout the national territory, so it remains as a great investment alternative to the bank deposits.
Property an investment alternative
According to a latest study, return on investment in property had increased in the last year from 7.1% to 7.8% at the end of the first quarter of 2018. A figure that is light years away from the performance under minimum the deposits, which multiplied by six the yield of 10-year government securities and doubling the average dividend yield of the largest Spanish listed companies. In Marbella the trend is not diferent and the demand for holiday apartments and villas will reach the highest in 2018.
On the other hand, commercial establishments offer the highest returns in most Spanish capital cities. The rents of these assets report gross profitability of 8.9%, compared to 8% of the offices or 5.6% of the garages. The deposits, increasingly less competitive and falling even from testimonial levels, extend the silver bridge to investment in real estate assets.
If you are interested in buying a property in Marbella to let and you haven’t met a lawyer in Marbella, please contact Mondine Abogados on +34 952 77 34 66 or visit their website for more information or to arrange a consultation. Mondine Abogados, has over thirty years of dedication in Marbella. If you haven’t found your dream property in Marbella yet, please do not hesitate to fill the form on Contact Us or give us a call on +34 952 811 010 Today! At Xcape we are open All day, Every day!<< Spanish property price rose again by 5.6% between April and June