Barcelona continues to attract property buyers from all over the world
Real estate in Barcelona / Unsplash
Real estate in Barcelona / Unsplash

Barcelona continues to attract real estate buyers from all over the world and is one of the best European cities for investment in 2020, thanks to its exceptional quality of life and growing number of investment opportunities. The city ranks seventh in the world in terms of attracting foreign investment projects, according to KPMG's Global Cities Investment Monitor 2019, largely due to the significant presence of potential qualified employees, an extensive network of industrial suppliers and the city's strategic location. The international real estate and investment service company, BCN Advisors reviews what 2019 has been like for the real estate business in Barcelona and what the keys are for 2020 in the Catalan market.

The latest data from the Land Registry in Spain show that foreign buyers in the province of Barcelona accounted for 9.6% of total sales in the third quarter of 2019, a slightly higher proportion than in the third quarter of 2018, when foreign buyers accounted for 8.8%, and significantly higher than the proportion for the whole of 2012, when they accounted for just over 6%.

With regard to property sales, from January 2014, around the beginning of the real estate recovery, investors buying property in Barcelona will have obtained an excellent return, with a price increase of 41.9% in the Eixample, 38.3% in Sarrià-Sant Gervasi, 37.6% in Gràcia, 37.4% in the Old Town of Barcelona and 32.2% in Sant Martí (which includes Diagonal Mar) during this time.

Since June 2019 there has been a slight downward trend, with an average price for the city as a whole of 4,114 euros per m2 in January 2020, an annual decrease of 2.9%. However, average prices have already exceeded those of January 2008, when the market peaked before the economic crisis, by 5.3%.

Average prices in 7 of the city's 10 districts have also shown annual decreases: prices in Barcelona's Old Town ended January at 4,308 euros per m2; 4,660 euros in Eixample; 4,176 euros in Gràcia; 3,740 euros in Sant Martí (which includes Diagonal Mar); and in Sarrià-Sant Gervasi, 5,336 euros per m2. The districts of Les Corts and Nou Barris registered annual increases and prices ended January at 4,855 euros and 2,574 euros per m2, respectively.

The variations in average prices per m2 in the 10 districts were as follows:

  • Nou Barris (+3.9%)
  • Sant Andreu (0%)
  • Les Corts (+1.5%)
  • Old town of Barcelona (-1.6%)
  • Sarrià-Sant Gervasi (-2.0%)
  • Eixample (-2.6%)
  • Horta Guinardó (-2.9%)
  • Sants-Montjuïc (-3.0%)
  • Sant Martí (-4.0%)
  • Gràcia (-7.7%)

In the case of rental prices, we are facing a different trend, as prices in the city on the whole registered a 2.2% increase at the end of January 2020, ending the month with 16.7 euros per m2. Average rental prices in all but one of the city's districts also showed an increase, with a 5.5% rise in the Eixample district (17.4 euros per square metre), 3.2% in Barcelona's Old Town (19.2 euros) and 2.5% in Sarrià-Sant Gervasi (17.0 euros). Average rental prices in Sant Martí showed a decrease of 4.5%, ending January 2020 at 15.6 euros per m2.

Barcelona: volume of sales transactions

Following the general trend throughout Spain, the number of transactions in the first nine months of 2019 in the city of Barcelona on the whole fell by 1.1% compared to the same period in 2018, with a decrease in sales from 11,257 to 11,132. However, they increased by 25.1% compared to the same period in 2014 (8,899 sales) and by 4.8% compared to the same period in 2007 (10,620 sales), according to data from the Ministry of Development.

The number of new home sales transactions in the first 9 months of 2019 recorded a decrease of 10.3%, from 621 to 555 sales. New home sales are still 40.6% lower than the same period in 2014 (937 sales) but are only 6.19% lower than the same period in 2007 (1,461 sales). New home sales in the city of Barcelona in the first 9 months of 2019 represented 5% of total sales, a slightly lower proportion than in the first 9 months of 2018, when they represented 5.5% of total sales. The proportion is also lower than in the same period in 2007, when sales of new homes accounted for 13.5% of total sales.

"Politically, 2019 was a rather turbulent year both in Catalonia and in Spain and this, in turn, had an impact on property sales," says BCN Advisors CEO Francisco Nathurmal. "With the formation of a new government in Spain and the negotiations to resume dialogue with Catalonia, we expect a renewed confidence in the real estate market and sales to recover again." Prices in Barcelona have grown exponentially since mid-2014, so the current slowdown offers investors the opportunity to take advantage of these attractive prices before they start to rise again. Barcelona remains one of the most attractive cities in terms of lifestyle for a number of reasons and investing in property here is bound to pay off in the long term.

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