The price of luxury housing in Barcelona has remained stable during the coronavirus crisis, according to the report Impact of the pandemic in prime areas of Barcelona prepared by Fotocasa based on data from DataVenues.
The prices of rental housing do suffer more pronounced decreases than the sale price.
The study shows that, despite the fact that prime prices have had a drop at the end of 2020 in most towns, this drop has been smoother than in the conventional residential market of Barcelona, thus showing greater resilience against the crisis.
On the contrary, the prices of rental housing have suffered more pronounced declines than the sale price. During the pandemic, the supply of this type of housing has increased exponentially, mainly due to the transfer from tourist accommodation to residential ones.
Legislative uncertainty in rent
The Rental Contract Income Updating Index (ARCA) continues its downward trend, although increasingly moderate, with the March figure standing at -1%.
"The economic situation we are going through is softening rents, however, the legislative uncertainty in the face of an imminent new rental law is slowing the pace", explains David Caraballo, Commercial Director of Safe Rental.
“In recent weeks, a lot of uncertainty has been generated among the owners with the possibility of the approval of a new law that puts a ceiling on prices, which is having an impact on the new contracts. Many owners are at the expense of seeing what happens, delaying operations and containing the offer ", continues the manager.
For Caraballo, «it is necessary to increase the supply of properties available for rent, if limitations are established, the opposite will be achieved. The market needs stability and certainty, which give the owners the necessary security to put their homes up for rent ”.
Residential land for properties of more than 1 million euros is exhausted in Barcelona
The economic earthquake unleashed by the pandemic has hit the brick sector, which in recent years recovered the pulse lost after the 2008 crisis. However, it has hardly caused an earthquake in the luxury residential market in Barcelona. The most expensive properties are a safe haven for baggy pockets and in times of uncertainty investment does not stop. The city of Barcelona, along with the main European capitals, is a magnet for national and foreign buyers, but the land available for new luxury homes is exhausted in the most privileged locations in the center of Barcelona. Real estate luxury is a rare and coveted treasure, even in times of pandemic.
Barcelona is among the most promising destinations for luxury real estate investment this year. This is reflected in the annual study Global Property Handbook, presented by Barnes, which shows how Barcelona continues to gain importance in the international real estate scene until it is in the top ten of the most interesting cities for real estate investment in 2021. Barcelona occupies the seventh place in the world. ranking, just after Madrid. The top positions on this list are occupied by Paris, Genoa, London, New York and Quebec.
"Barcelona is very powerful from a real estate point of view, as it is constantly attracting both large fortunes who seek to reside in a city with a high quality of life, as well as investors who take advantage of the competitive prices and the excellence of its residential park to buy assets and then sell or rent them. High-end real estate has consolidated in the last year as a very stable segment and in which large estates have found a safe haven for their finances ", says Thibault de Saint-Vincent, president of the BARNES group.
From the firm they point out the choice of Barcelona for its competitive prices compared to other large cities, as well as for the quality and variety of its real estate stock, among other aspects. "The progressive opening of borders as a consequence of the return to normality points to a change in the buyer's profile in Barcelona. While during the pandemic the national demand was the absolute protagonist, monopolizing 80% of the purchase and sale operations and with a tighter budget, the weight of the international buyer will be greater for the second half of the year, "says Eduardo Crisenti, managing partner of BARNES.
For this reason, Crisenti is "very optimistic with the forecast for this year in Barcelona" as a focus of international investment, especially in a super-luxury segment (with properties of more than 5 million euros), which we note is a market that is very much alive during these last months ".
As for prices, the expert speaks of a forecast increase of 3% in the luxury segment. "The expectation is a progressive improvement that will settle in the last quarter, both with a small rise in prices and with very good balance sheets with the numbers in terms of sales," says Crisenti.
Barcelona has a greater presence of national or Catalan-based investors, a trend that may continue this year. "Below one million euros the demand is still local in Barcelona; up to a maximum of 2 million euros is divided between Spanish and foreign buyers, especially French and British; and above 2.5 million euros the clientele is 100% foreign, both for the purchase of primary and secondary residences and for rental investments ", points out Emmanuel Virgoulay, partner of BARNES.
According to Barnes data, home sales fell by 29% in Barcelona last year compared to 2019. The districts of Eixample and Gràcia were the areas that suffered the most, with decreases of over 40%, since "they depend a lot on the tourism investment ", explains Virgoulay. As for the sale prices, the expert estimates that in 2020 they have been between 10% and 20% lower than the presentation prices and believes that by 2021 "they may go down a little more."
The coronavirus continues to change everything it touches day by day. Although it is true that luxury is one of the sectors least exposed to crises, its activity in Barcelona is waiting for vaccines and the long-awaited herd immunity to return normality to the market. French, Italians, Russians, Belgians and British, the nationalities with the greatest presence in the foreign market of the Catalan capital, continue to analyze their investment possibilities from a distance when the borders open.
The current stabilization of prices and the absence of international demand opens a window of opportunity in the short term for the closing of operations that favors both buyers and owners.
Since the pandemic broke out, the luxury market in Barcelona has moved between 500,000 euros and a million, with average prices of 6,000 euros / m2. At this time, the real estate supply with prices above 2 million euros, which until the beginning of the crisis found potential buyers from abroad, does not find a buyer among the national demand, so its owners are forced to lower their prices or to resign oneself to not selling.
The data on the efficacy of vaccines at the beginning of 2021 have brought some optimism to the market, although there is still a long way to go until it returns to the new normal. Barcelona is, by far, the most desired Spanish capital for the purchase of main residences by foreigners who not only come to work, but are in love with the city and want to stay and live, so the absence of this Buyer or investor profile is being noticed in the number of transactions, but it also allows national demand to access the market with more competitive prices.
The interest of the local buyer for the acquisition of luxury homes in Barcelona is still very stable in the two main districts of this market, Sarria-Sant Gervasi and Eixample, which account for two out of every three homes for sale of more than 500,000 euros. The Eixample area accounts for 34% of the city's luxury offer, while Sarrià-Sant Gervasi and Pedralbes another 32% of the total.
The average home in the high-end market is sought as a main residence, it has around 150 m2, 3 bedrooms, 2 bathrooms and outdoor areas. Although refurbished or in good condition homes are preferred, the demand does not rule out acquiring properties to be refurbished as long as there are notable reductions in the sale price.
According to the monthly report on the sale prices of flats, second-hand housing in Catalonia in January 2021 had an average price of € 2,155 / m2. This figure represented a monthly cut of -0.33%. Year-on-year, it rose by 3.55%, being the second region that rebounded the most.
Catalonia is the second region that increases the price of housing the most compared to last year: 3.55%
Housing in Catalonia in January 2021 had an average price of 2,155 euros per square meter, falling by -0.33% compared to December 2020.
From one year to another, Tarragona (3.92%) was the seventh that increased the most at the national level. In addition, Girona (-1.41%) had the thirteenth most intense adjustment in the country.
Catalonia was the fourth most expensive autonomy, behind the Balearic Islands (€ 3,104 / m²), among Others. As for second-hand housing in Spain, in January 2021 it registered an average price of 1,715 euros per square meter, showing a monthly decrease of -0.23%. From one year to another, the registered figure marked a rise of 0.60%.
The price of housing in Spain continues to fall timidly from month to month, gradually assimilating the impact of the health crisis, as we had anticipated. Throughout the year it is to be expected that the percentages Thrown to fear the comparatives will absorb the Behavior of demand towards supply. Buyers are coming back onto the pitch very little by little. In exceptional situations such as the pandemic, the fear of aspects such as lack of employment does not help the security that must be counted on to take such an important step.
Given the different territorial sensitivities towards the housing market, we will see how factors such as the expansion of telework, the New Needs of space or the increase in the available supply influence more or less in some areas than in others. We must not lose sight of another variable such as Financing, since the Entities will look closely at the Loan Applications for the purchase of a home.
Barcelona was the second most expensive capital in the country
Monthly, Tarragona (0.35%) showed the only rebound among the Catalan provinces. In addition, Barcelona (-0.51%) registered the ninth most striking decline in the country. Year-on-year, Girona (8.57%) showed the second most relevant increase on the national scene. Tarragona (-0.77%) was the fourth Spanish province that least adjusted. In terms of prices, Barcelona (€ 2,410 / m²) WAS the fifth most expensive Spanish province. The cheapest in the region was Lleida (€ 1,076 / m²).
As for the Catalan capitals, Lleida (0.42%) recorded the most intense monthly increase in autonomy. Barcelona (-1.85%) was the second Spanish capital that fell the most in this period. From one year to another, Tarragona (3.92%) was the seventh that increased the most at the national level. In addition, Girona (-1.41%) had the thirteenth most intense adjustment in the country. With 4,438 euros per square meter in January 2021, Barcelona was the second most expensive provincial capital in Spain. On the opposite side was Lleida (€ 1,148 / m²), which was the fourth most affordable in the country.
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