#spanishconstruction

[coldwell-banker-sant-cugat-eng]

Limited Land Means Higher Property Prices in BCN

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.

[coldwell-banker-sant-cugat-eng]

New Builds in BCN 2016

Not all Predictions for 2016 are Positive

Among the many summaries of 2015 and predictions for Barcelona’s property market in 2016 an article by Oscar Munoz appeared in the Spanish daily newspaper La Vanguardia. The report predicts that the hype given to the recovery of Catalan’s building industry is over rated. Many experts have pointed out a rise in the number of new homes being built in Barcelona and Catalonia indicating that this is a sign of good things to come in the Barcelona property industry. Last year the number of new builds increased and the surface area being built rose by 26 percent. This is almost four times the increase in new builds in Barcelona recorded in 2014. However the recent article in the Spanish daily points out that most of these new projects were actually planned during the boom years and simply put on hold through the worst of the property crisis. Now as things seem to be improving many of these projects have been reactivated. Munoz also points out that most of the building took place in the first half of 2015 and then slowed down dramatically. This would indicate that new build figures are dropping or at least not as significantly increasing as predicted by most speculators. The increase is still too low to indicate an eminent recovery in the Spanish new-build property market. In 2015 planning was approved for 6,351 new homes in Catalonia; this was an improvement on 2014 but still much lower than the “normal” level” of building activity which should be 20,000 new homes given the demographics. In conclusion we can say that there have been signs of improvement but it is too early to crack out the Champagne and declare a recovery.