Warning for banks ‘ situation imposes actions to protect savings and push money circulation again . Among the most valuable solutions, real estate investment is one of the best. Barcelona city center case: prices fall and high yearly profitability.
The first six month of 2012 were characterized by the financial crisis escalation in Europe. The hard situation in Greece, that opened Pandora’s box in the whole Euro area, it’s just the first case of a series of European countries with serious difficulties. European community and its members must face the immediate need to establish again their internal rules in terms of finance, market, occupation, production and consumption. Fighting instability and generating again confidence and growth is the most urgent challenge.
In times of crisis, with banks risking bankrupt for their uncontrolled credit policies and mass media spreading dramatic news, fear is the first reaction at every level. Banks ‘ fragility suggests to Spanish and European savers to find ways to protect their money from bankruptcy danger and corralitos. The most safe way, that many people are taking into account, is a real estate investment.
In this sense, buying a flat in Barcelona city center is a convenient opportunity in terms of profitability, as prices fell off a 50% from 2007, unlike in other European capitals. The privileged location of a centric property, in an active city like Barcelona, assures an abundance of potencial tenants with a good profile, and a 6% yearly income.
A concrete example: an apartment in Casco Antiguo, the old town of Barcelona, with a price of 110.000 € and an area of 45 square meters, gives an approximate rental of 7.200 € per year, that means a gross profitability higher than 6,5 % on the purchase value. In other cases, depending on the flat’s features and location, profitability could go from a 5,5 to a 7,5%. It could be even more interesting in fiscal terms, thanks to tax benefits from 60% to 100% if the property is rented by over 30 young people.
This is a really attractive possibility for investors from different european countries, as it represents, as said, the concrete opportunity of a high profitability and it also means the chance to take advantage of a new growth of the property value in the medium term.
