Investing in Barcelona has always been a good idea but now is actually the perfect time to buy a Barcelona property whether it is for buy-to-rent; as an investment or as a second home. A Barcelona property could provide buyers, especially foreign buyers with an income when they retire or even a retirement home for themselves. The city is currently attracting a lot of interest from property investors; the Barcelona property market is on the cusp between being reasonably priced and being extremely valuable. Property prices are climbing but have not reached great heights. If those “in the know” are putting their money into Barcelona property then shouldn’t you?
Property Trends
There is a trend for investors to buy cheap, renovate and sell. Others o the same but they hang on to the properties to use as rental units either for long term or short term (if the property has a tourist rental license). If you are not a major investor but are looking for just one property then you need to move fast as those with a lot of money and experience are gobbling up available low cost homes in the downtown area to renovation, resale or rent. The savvy investors are already buying up both small and large properties for this purpose and the trend looks like it will continue as Barcelona has more built properties than vacant land.
Supply and Demand
There is a high demand for rental properties in Barcelona. It is and will continue to be a hot vacation spot and a popular retirement city. The tax benefits for buyers are favorable and foreigners can benefit from the Spanish Golden Visa.
Easy Purchase
The purchase process in Spain s not complicated. Of course you must seek guidance from a reliable real estate agent like Coldwell Banker and from a trusted lawyer before making any property purchase in Barcelona.
Market is on the Rise
Although the property market in Spain has not reached the heights of pre-2008 it is still showing that it is moving in the right direction and has no indication that it will stop. If you buy Barcelona property now it is almost guaranteed to go up in value in the next few years.
Spanish property is a valuable asset to your financial portfolio. There is a low deposit account rate investors are not receiving a high return on money left in the bank. For this reason many people with a little money “on the side” are looking to property investment rather than bank savings accounts for their extra cash. Purchasing Spanish property especially in Barcelona is a sure thing as there is no chance that Barcelona will ever lose its attraction to tourists and so there will always be a need for rentals.
Whether the property you purchase in Spain is for short or long term rental or as a second home it is a good investment that will show you higher returns than a simple bank saving account. The Spanish properties are cheap compared to other countries and so even if you only have a little money at your disposal for investment you can afford a house in the sun. With low cost properties; generous mortgage terms and a high demand for property Spain is ideal for an investment portfolio. A diverse portfolio is always a good thing.
Effects of Brexit and Current House Prices in Spain
The Spanish Property Registry reported a 20% increase in the number of homes registered as sold in August as compared to the same period 12 months ago. This positive statistic indicates that the market recovery continues after having a brief shock when the British public votes to exit the European Union. Many transactions in the Spanish property market were put on hold temporarily as buyers and sellers waited to see the result of the Brexit referendum. And so one the outcome was known sales that may have been on pause were completed thus shooting the statistics up. This gives a distorted picture to the number of house sales in Spain for August.
August House Sale Figures and Foreign Buyers
We must remember that not all transactions involved foreign buyers or sellers so that the statistic does in some way give an accurate reflection of the Spanish property market. Taking a look at the regional figures can give a more accurate picture as it is possible to isolate regions where foreign buyers tend to purchase property. For example foreign buyers tend to favor the Balearic, Almeria and Barcelona. All three of these regions showed significant increases in the number of house sales registered in August on a year-on-year analysis. Barcelona sales were up 25% in August with transactions being made by buyers from around the world, not just the UK.
In conclusion the decision by Britain to exit the EU has caused a slight impact on the Spanish property market but sales continue to grow.
More signs of Brexit’s Impact on the Spanish Property Market
The Director General of Registries and Notaries in Spain recently announced that Power of Attorney witnesses by British Notaries will no longer be valid in Spain. The DGRN is part of the Spanish Ministry of Justice. The explanation for this decision was given that British notaries do not have the same function as Spanish notaries. The difficulty for British property owners or purchases in Spain will be having to employ the services of a Spanish notary although British lawyer notaries may be acceptable.
Figures are often published about the state of property prices in Spain but often these can lead potential buyers in the wrong direct. National figures for Spanish property prices reflect average prices across this vast country and could be completely erroneous for your particular region. The figures which can guide potential buyers (and sellers) are regional figures.
Spanish property evaluation company, Tinsa recently published their statistics for the latest quarter of 2016. The figures show that the property market recovery in Spain is not uniform across the country and that some regions are thriving while others are still battling to dig themselves out of the sump which followed the crash of 2007/08.
The overall national property prices rose 0.8% in the year on year comparison for the third quarter. However figures for each region vary. The most pronounced property market recovery in Spain for the third quarter 2016 can be seen in Madrid and Catalunya with 12 month averages of 4.8% for Madrid and 6.5% for Catalunya. The third region to be recovering nicely is the Canary Islands which a year on year rise in property prices of 3.8%. The northern region of La Rioja saw a rise of 3.7% in property prices and the Basque Country house prices rose by 3.5%.
Spanish regions which have not been so lucky and continue to have slow house price rises or none at all include Murcia, Cantabria, Navarra and Castila y Leon. Of the cities which saw the highest rise in prices over the last year there is Barcelona in the lead with a 6.8% increase in prices and Malaga with house prices rising 6.1%. These two cities and their regions are popular with home buyers as well as foreign investors and foreign buyers looking for a second home. For the number of regions with positive rises in house prices there is an equal amount of regions with house price declines.
The average value of property in Spain in general is still 40.9% lower than in 2007 before the property bubble burst.
There are several bodies in Spain which track the ups and downs of Spanish property prices; the statistics gathered by these bodies are never identical. However if you look at the top index trackers results together you can get a clear picture of the direction Spanish property prices are going. Among the most respected and reliable bodies which track the Spanish property prices there is the General Council of Notaries, Tinsa appraisal company and Fomento, a government body.
The movement of the average property prices in Spain appears not to have changed that much over the course of the last 12 months. The General Council of Notaries assessed that the average property price nationwide fell by 1.9% when compared to the same period last year where as TInsa showed a rise of 0.3% for the same period. Nationwide it appears that the market still has a higher supply than demand in property; in other words there are more houses on the market than people looking to buy.
Although these national statistics are interesting they don’t really contribute to a buyer or seller interested in making a transaction. Statistics related to the property buyer or seller’s local property market would be more relevant and be able to guide them through a transaction. The national figures produced by the top assessment bodies in Spain should not influence a buyer or seller’s decision about how and when to sell or buy a Spanish property. A better indication would be a survey made in the specific area where you are intending to buy or sell. It is advisable to get advice from a reputable real estate agent who knows the local market, like Coldwell Banker in Barcelona.
The Barcelona Metropolitan Area surrounds the central area of Barcelona; it covers just over 3,000km² and is home to just over 5 million residents. The surrounding metropolitan area of Barcelona includes the area running down the Catalan coast and is bordered by the Mediterranean and the Collserola Mountains. In the surrounding areas there are residential neighborhoods with detached and semi-detached houses often with large gardens and swimming pools. There are housing complexes with shared amenities including tennis courts and pools. What makes these neighborhoods special is that they also have forests and mountains nearby giving them a suburban, village and rural feel. For example there is Sant Cugat del Valles, Sant Vincente dels Horts, Sant Just Desvern and Sabadell. These areas are prestigious luxury neighborhoods where Coldwell Banker represents many properties.
Sant Just Desvern
Coldwell Banker represents properties in Sant Just Desvern which has a village feel and is just 10 minutes from Barcelona via highway B-23. It is also close to the Collserola Park. Sant Just Desvern has many gardens, parks and green areas. About 15% of Sant Just Desvern’s population is foreigners and more than half of them are Europeans. The small municipality has a low crime rate and many amenities including schools for all ages. Sant Just Desvern hosts several festivals and special events each year including the mini-racing Karts e Coixinets and the Festa de la Pau. Their main festival is Festa Major that takes place in August. Sant Just Desvern includes in its landmarks ancient ruins like the Iberian settlement of 6th century BC and 1st century BC Roman medieval town and a quaint flour mill from 1306.
Poblenou used to be an industrial area of Barcelona but between the 70s and 90s more than 1,300 industries closed down leaving prime real estate in Barcelona open for new development. Situated in the Sant Marti District Poblenou has many surprises. The identity of Poblenou was redefined in the last 10 years as Town Hall took an active role in redevelopment and improvement of the area’s infrastructure. Today the former industrial area is becoming a hot location. Poblenou is at the strategically important intersection of Avinguda Meridiana Gran Via les Corts Catalanes and Avinguda Diagonal.
At the heart of Poblenou is the Placa de les Glores Catalanes, a public square not far from Barcelona’s ultra-modern Torre Agbar, a bullet shaped skyscraper which houses a shopping center and offices. Thanks to the municipality’s redevelopment Poblenou is now well connected with the city center via the metro and tram system. You can go directly from Poblenou to Placa de Catalunya and the city’s famous landmarks.
The latest development in Poblenou is called 22@ and includes an underground train station and underground roads so that the above ground area can be used open green spaces, museums, a library, sports center and medical facilities. There are plans for a new connection between Poblenou and the Barcelona airport.
Poblenou Real Estate
Residential property in Poblenou costs approximately €3,800 per meter squared which is not far from the going rate in central Barcelona. Commercial real estate in Poblenou is sold for approximately €2,700 per square meter for office space and €1,950 for street-level retail space. This is even higher than in central Barcelona. Property demand for both purchases and rentals is on the rise in Poblenou with rental demand rising by 11% in the last twelve months. Real estate in Poblenou is popular for Spanish and foreign buyers who are interested in this area mainly for the beaches and affordable apartment prices. The area’s location near the cast makes it of prime interest for buyers. Gentrification of the area has also attracted buyers who can afford a higher standard of living. With industrial structures being replaced by residential property about 65% f the area is now residential. There has been an increase in the number of hotels and offices in the district over the past 5 years. Poblenou also attracts tourists because of the gorgeous beaches like Mar Bella and Bogatel. There are other points of interest like the local market, Poblenou-Manuel Arranz library and Rambla del Poblenou. The area has the prestigious School of Professional and Executive Development which ranks among the top universities in the world. Poblenou also has several excellent restaurants and bars.
The Catalan capital is limited in its expansion because of its geographical position between mountains and the sea. This physical limitation means that the amount of building space available is at a premium. With limited space it means that “space” is valuable and as there becomes less and less available space the price of housing is bound to go up. It is likely that the price of housing in Barcelona will rise in the coming year by approximately 7-10% as land becomes scarce. With limited new development space the movement in the building industry is concentrated in refurbishing – taking existing properties and turning them into more viable properties. In some cases properties are given a new function – office space can be converted into residential property which has a higher asking price. That said there has been an increase in new construction in Barcelona recently. Reassignment of function of properties is especially noticeable in projects undertaken in Ciutat Vella, Gracia and Eixample. Planning authorities are responsible for authorizing the release of land for new developments which would alleviate the rising prices of houses in Barcelona.
