Luxury housing becomes 6% more expensive in 2022 with the French as 'top' buyers
The luxury real estate sector in Barcelona closed 2022 showing its resilient character and consolidating its importance as a refuge value. The high-end residential segment continues to be one of the favorites of large portfolios looking for a safe investment with stable profitability that does not depend on macroeconomic factors. Luxury housing in Barcelona has increased its average price by 6%, an indicator that has been the main driver of the number of operations registered during the year in this segment.
Regarding the average profile of real estate demand in this luxury market, this year the foreign buyer has stood out above the national, with French citizens being the most interested in acquiring properties from 1 million euros.
The most sought-after homes are those with large terraces or patios and are located in buildings with gardens or communal areas. And it is that properties with exterior elements are much more attractive after the pandemic, so those that do not have them are the most sensitive to a reduction in their publication price so that their sales periods are not so long.
The regions with the most high-end real estate interest in the province of Barcelona are: Barcelona, Esplugues de Llobregat, Sant Just Desvern, Valldoreix, Sant Cugat, Sitges, Castelldefels and Sant Andreu de Llavaneres.
2023 will be an excellent year for the luxury real estate market. Housing will continue to be the best option for those families who wish to protect their savings and increase their quality of life by acquiring a property with better benefits. On the other hand, there will continue to be an upward trend in buyers who are currently renting and want to own their own home, especially foreigners who, after living a year renting, make the decision to buy because of their desire to continue residing in Spain.
In conclusion, the forecasts for 2023 prices will remain stable and with slight increases in the premium segment. The increase in the cost of financing will make supply more balanced with demand. For this reason, the evolution of the real estate market, marked by instability, will surely be related to the duration of the war in Europe.
According to the monthly report on rental prices, the typical apartment in Catalonia registered an average price of €12.01/m² in November 2022, which represented a monthly decrease of -0.17% (compared to October), the most Spain content. Compared to November 2021, the rise was 9.38%, the third largest national rise.
Catalonia was the third autonomous region with the most expensive monthly payment for tenants, behind Madrid (€13.79/m²) and the Balearic Islands (€13.51/m²). For its part, the typical rental apartment in Spain had an average price of €10.38/m² in November 2022. This figure showed a monthly rise of 1.27%. In the year-on-year comparison, it grew by 4.74%.
Compared to October, Barcelona (2.89%) showed the second highest rise in Spain. From one year to the next, Barcelona (15.45%) ranked fourth in the general ranking of promotions. With €13.90 per square meter in November 2022, Barcelona was the most expensive province for renters in Spain, while Tarragona (€6.39/m²) was the cheapest province in Catalonia.
As for the Catalan capitals, they all rose monthly, with Barcelona (2.44%) showing the fifth highest rise in Spain. Year-on-year, all the Catalan capitals rebounded. Girona (20.68%) was the second with the greatest increase in the country. In the price section, Barcelona (€19.75/m²) was the most expensive provincial capital in Spain.
- Rental prices reinforce their upward trend.
- The rises are widespread and it will be difficult for this evolution to change sign because this market is under great pressure.
- The main problem is the lack of supply. Owners who had been renting for a long time withdraw their properties from the circuit because they are not willing to submit to a ceiling on rents, since they also suffer from inflation
- Those who have just arrived make high monthly payments that drive many tenants out of the market, but these properties have no problem renting out quickly despite their price.
- It is not foreseeable that prices will move towards containment because now the interest rates of mortgages do not favor the purchase, so many will extend their stage within the lease.
- The available homes are unable to respond to the increasingly large demand, especially in large cities.
- Hardening of the prerequisites to be able to rent.
- Occupancy and vandalism are fears that lead landlords to impose important filters when selecting tenants, such as deposits, guarantees, insurance or several months of deposit in advance.
Source: F. Font / www.pisos.com
If definitively approved, the new law would give city councils and homeowners' associations instruments to act against the illegal occupation of homes in those cases in which these actions generate dangerous situations for the building or alterations in neighborhood coexistence.
Good news comes with the announcement made today about the presentation of a bill in the Parliament of Catalonia that gives instruments to town halls and communities of owners for acting against the illegal occupation of real estate in those cases in which these actions generate dangerous situations for the building or alterations of the neighborhood coexistence.
“On different occasions we have already expressed ourselves around the problems that usually surround illegal occupations, from which coexistence problems are generated not only in the property but also in its surroundings. Different pieces of information that have appeared in the media these weeks highlight the use of any type of strategy, including the use of minors by mafia-like organizations, which increasingly generate more alarm and social rejection," says Carlos Sala, spokesman and manager. Legal API Catalunya.
As recalled by the organization, the groups of real estate property professionals (COAPI-AIC) promote and ensure that the owners maintain the social function of the home, so that it is used for the purpose for which it was intended and to avoid these anomalous uses that end up having a negative impact on the quality of the welfare state. "In fact, it is often certain large holders, linked to financial institutions, investment funds or even the SAREB who ignore these illegal jobs, because their ownership of the property is circumstantial," says the expert.
"Despite supporting this proposal, we understand that it is complementary and that it must be accompanied by those other initiatives that have been announced these weeks in the field of the State legislature to build a regulatory corpus that provides legal certainty as soon as possible to put an end to this problem that has not stopped growing in the last decade”, affirms Carles Sala.
THE DEBATE ON THE REGULATION OF THE ILLEGAL OCCUPANCY OF HOUSES CONTINUES
The recent agreement of the Council of Ministers on December 5 on the recommendation to file an appeal against a specific section of article 12 of Law 1/2022 is consistent with the set of legislative initiatives that have been announced to fight against a scourge that it creates social alarm and is taken advantage of by mafia organizations”.
The appealed article favored the occupation of homes, since since the approval of Decree Law 17/2019 the term from which the law protects and normalizes illegal occupations of residential properties has been extended.
The API reiterates the need to quickly resolve the legitimacy of this rule due to the legal uncertainty generated by these laws. They also express their surprise at the fact that the appeal does not address aspects declared unconstitutional after the approval of Law 1/2022, such as the mandatory social rental prior to filing a lawsuit.
Given the information that appeared on the agreement of the Council of Ministers on December 5 on the recommendation to file an appeal by the President of the State Government against a specific section of article 12 of law 1/2022, we want to make our positioning.
a. Squats: The reviewed article favored the occupation of homes, since since the approval of Decree Law 17/2019, the term from which the law protects and normalizes illegal occupations of residential properties has been extended. For this reason, we value favorably that, with the announcement of this resource by the President of the State Government, the consensus is extended to put a stop to the illegal occupations of houses.
That the State Government intends to put a stop to the current regulations that give legal coverage to squatting without qualifying title, we understand that it is consistent with the set of legislative initiatives that have been announced in recent months, aimed at fighting this scourge that creates social alarm and that is taken advantage of by mafia organizations that, among other things, take advantage of people in vulnerable situations.
b. Legal uncertainty: The appeal of the President of the State Government is the third that is accumulated against this law that is presented before the Constitutional Court and, therefore, we reiterate the need to quickly resolve the legitimacy of this norm, given the legal uncertainty that They generate these laws that, as the Court declared, contain “coercive, non-voluntary measures, limiting the right to property. Limitations of the maximum intensity, (...) that closely pressure the owner" (STC 16/2021).
c. The unconstitutionality of the procedural obligations of the forced rent: While waiting to know the possible agreements of the State-Generalitat Bilateral Commission for having limited the recourse of the President of the State Government to only one article of the law, we express our surprise for the fact that the appeal does not attend to aspects declared unconstitutional after the approval of law 1/2022.
We would like to remind you that recent decisions of the Constitutional Court leave certain obligations prior to the presentation of executive actions in the judicial sphere out of the compulsory rent due to their incidence on procedural law. Remember that STC 28/2022, on Decree Law 37/2020, already declared the lack of competence of our legislator regarding the procedural requirement of having to offer a mandatory social rental prior to filing the lawsuit. In addition, it determined the impossibility of interrupting procedures initiated and also declared the incompetence to regulate from Catalonia the suspension of launches for any reason. Similar arguments reiterated after STC 57/2022, of April 7, precisely to an appeal by the Government of the President of the State Government, to (among others) arts. 17 and 18 of the Catalan Law 11/2020, which treated these issues identically.
d. Vulnerability: From the API collective we have always expressed ourselves in favor of protecting vulnerable situations of people in a situation of difficulties to stay in a home, but this is a welfare policy that cannot be charged exclusively to the owner, and it should not be legitimized and regularize the illegal occupation of real estate as a way of accessing a house.