One of the aspects an investor usually looks at when deciding where to invest is the economic health of the population. How Much Do Spaniards Earn? Today, we want to talk a little about the average income received by a Spaniard.
The Average Income
The average income in Spain is €1639 per month. However, this stat can be tricky, because the European Union had to warn Spain several times about its inequality issues when it comes to earnings. As a matter of fact, according to the EU, in 2017 (the last year there is for stats for now) Spain was the worse country in Europe. Other countries with a similar, but slightly better, performance were Bulgaria, Greece and Lithuania.
If you are planning to invest, taking a look to the regional differences could be also helpful. The difference between the region with the highest average salary in Madrid, with €1933 per month, is a €605 difference with Extremadura, the region with the worst salaries.
Other regions in the top 5 are País Vasco, Navarra, Cataluña, and Asturias. Popular regions among UK expats like Baleares, Comunidad Valenciana and Andalucia are all below the country average.
Another interesting factor if you want to buy a property to rent it is the renting price. Madrid, Cataluña, Baleares and País Vasco are the regions with highest prices, and only they are above the average. The region with lowest prices is, again, Extremadura.
When it comes to profitability, it highly depends on cities and even on areas of the cities, more so than the regions. It is important if you are going to buy property to rent and you don’t know the market that you ask someone independent who doesn’t have a conflict of interest. If you ask your real estate agent, who will earn a nice fee by selling you a house, you may not be getting the most honest opinion.
According to the Spanish Central Bank, the profitability of renting a house is a nice 4%, and 4.2% in 2017. If we add the profitability due to the rising value of the property, the number grows in 2017 and the profitability reached and awesome 11.4 %, but there is no data for 2018 yet.
There is No Safe Investment…
As we always say, the stats may seem interesting, but they are built from the past, and sadly, you can only invest for the future. Real estate investments can lose money or have illiquidity issues.
If you are planning to invest, take a look to the amount of properties offered in the area; call some advertisers that are currently renting their property and compare the rent they are getting with the price you are about to pay for buying the property. Think about your personal financial situation and the chances there are for you needing that money in the coming future.
You know what they say: Make money on things you understand.