barcelona luxury real estate q1-q2 market report 2011
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DESCRIPTIONAlex Vaughan, Director of Lucas Fox said:While the first half of the 2011 has seen further drops on key housing indicators in Barcelona, the luxury end of the market has held steady in sales prices and seen some increases in rental price for exclusive properties located in the centre of Barcelona. The lack of quality luxury apartments and houses should mean that prices in this segment of the market will remain stable. We predict that for the immediate future buyers will be able to secure Barcelona properties at competitive prices. Given the current economic conditions and lack of finance available to local buyers, international clients should be willing to hold on to their properties for longer as it will be several years before the next growth cycle.
- 1. BARCELONA REAL ESTATE MARKET REPORTQ1 & Q2, 2011 RELEASED AUGUST 2011This Barcelona real estate market report has been developed by Lucas Fox International Properties to provide investors, propertyowners, renters and businesses with the latest information available to guide Barcelona property decisions. Luxury properties in Bar-celona continue to be the best performing segment of the overall Barcelona real estate market, as buyers seek quality and exclusiveproperties that will retain their value over the years ahead, while providing a quality base for living part or full time or operating abusiness in the most cosmopolitan of world cities. If you are serious about owning property in Spain, the current market presents agood opportunity to secure bargain prices for quality Barcelona real estate.You can keep receiving up-to-date market reports from the Lucas Fox International Properties team. Subscribe to future updates at our website(www.lucasfox.com) or bookmark our blog (www.blog.lucasfox.com) for the latest news on Barcelona real estate. For any questions about Barce-lona real estate, please contact one of our sales staff on +34 933 562 989.The Barcelona Real Estate Market The relative lack ofFigure 2: Average Asking Prices for House Sales(in 000s): Spain and Barcelona July 2010 - June 2011Nationally, the Spanish housing sector and propertymarket has continued its downward trend, although supply and high levelnot as steeply as was the case in other housing mar-of demand for quality luxurykets such as the US. Despite this, the luxury propertymarket in Barcelona and in other key Spanish loca-apartments and housestions (see our Market Reports for other areas) has dis-played some resilience. This reflects a global trend in will mean that prices in thisboth luxury property sales and more broadly in thesegment of the market willluxury consumer market.In Barcelona, after a small start-of-year drop in maxi- remain stablemum euro prices per m2, housing prices at the exclu-sive end of the market remained stable. For the av-erage price properties in Barcelona and Spain, thereAlex Vaughan, DirectorAt Lucas Fox, the first half of 2011 has seen a highwas a continuing dip in housing prices ( Figure 1)i.level of demand for luxury Barcelona real estate, inHowever, in Barcelona average asking prices for Lucas Fox Barcelonahouse sales were on average much higher than in particular for apartments in Barcelona city centreFigure 1: Average and Maximum Euro Price (in 000s) per m2: Spain and Barcelona July 2010 - June 2011Spain overall. For the first half of 2011 average sales suitable for tourist rentals and villas in the city andwere 166.6% higher than the Spanish property av-on the coast. This is in contrast to the situation witherage ( 236,000) (Figure 2)ii & iii .property sales of average properties, which saw alackluster second quarter (Figure 3).The small month-to-month drop in average priceshas led some property analysts to suggest that the The slowdown in Barcelona property sales at themarket is bottoming out, while more bullish analystslower end of the market is partly due to the introduc-have been suggesting that the environment is idealtion of new mortgage taxation laws but also due tofor strategically picking up property the lack of finance available to local buyers, says Alexinvestments at low prices. Other analysts have notedVaughan, Director, Lucas Fox Barcelona.that with Spanish banks still holding onto largeamounts of property assets and an uncertain eco-nomic environment, some further price adjustmentdownwards is to be expected.
2. Barcelona Property Prices During Q1/Q2 2011 weThe first half of 2011 showed a drop in average EuroFigure 5: Barcelona property price quarterlyprice per m2 for Barcelona real estate to 3,752 per m2.variation between Q1 and Q2 2011have enjoyed a 96% in-Maximum property prices remained steady at 4,888per m2 for the full half year. New housing construction crease in web site visitors over Q3/remained subdued. Q4 2010. Most interestingly we haveQ1 20114,2%recorded a rise of 300% with RussianSalesiv: Sales prices for all of Barcelona averaged at3,907 per m2, a fall of 3,4% on sales figures from4,7% 4,6% clients in the two last quarters. As anthe end of 2010 when prices averaged 4,046 per m2agency, we have seen a 230% rise(Figure 1). Maximum prices were recorded in Sarria-3,3%Sant Gervasi (6,035 per m2) and Les Corts (5,657 per 3,1%in qualified enquiries from Russianm2), with the most exclusive properties in Eixample property investors and buyers. Withreaching 5,293 per m2.a high level of enquiries and interestFigure 3: Barcelona and Spain Urban Property Sales 7,1%Transactions January - May 20112,2%from other emerging markets andour traditional client base the firsthalf of 2011 has been anything but Foreign Investmentbleak. 2011 has seen increased interest in Barcelona and Ca- talua property from non Eurozone property inves- tors. Demand from Russian and former Soviet buyers Anthony Leaton, has been strong figures show that the large number of Russian households with a high level of cash assetsMarketing Director and a small amount of borrowings has resulted in a 30% increase in demand for purchasing overseas pro- perties. Buyers have shown a particularly interest inFigure 6: Lucas Fox Top 11 website visitors second homes and commercial properties in Barcelo- Figure 4: Catalua and Spain Housing Constructions by country for January - June 2011 naviii. Russian property investment is set to be replica-Commenced January 2011 - April 2011 ted by affluent consumers in other emerging markets, including Mexico, China and Brazilix. Within Europe, Lucas Fox have noted growing interest in Barcelona property amongst Swiss and Nether- lands residents (Figure 6 & 7). This interest in the lo- cal property market has been matched by increases in tourist numbers from these same countries in the first half of 2011.Constructionv : Construction of new properties in Ca-talua, including Barcelona, remained low for the first Figure 7: 2011 international drivers of current Barcelona foreign property investment trendsthree months of 2011(Figure 4).Q2 2011Salesvi: The years downward trend continued in thesecond quarter of 2011, with average sales prices hit-ting 3.752 per m2 by the end of June. There was a European market:4% variation drop in average prices overall (Figure 5)Netherlands andmaintained the first quarter levels.Switzerland show interestConstructionvii: Construction figures for new Barcelo-na properties forms part of the overall Catalua sum- UK marketRussian market:80% of UK residents1 million+ householdsmary results. These are expected to be released by thewant to buy Spanishwith $425K cash assetsIdescat on 29 September, 2011. property for theirretirement 3. Barcelona Rental Property Lucas Fox Analysis and PredictionAverage rental prices (Figure 8) for Barcelona properties for the Second Half of 2011dropped slightly (-0.2% variation) between the first andsecond quarters of 2011, from 12.1 per m2 to 11.7 perm2x.W hile the fir st half ofQ1 2011xi 2011 has se e n fur the rCiutat Vella (13.5/m2) had the highest rental prices,with Sarri-Sant Gervasi (12.4/m2) and Les Corts (11.9/drops on ke y housing indica-m2) also high.tors i n Barce lona, the lux ur yen d of the mar ke t has he ldSitges VillaQ2 2011 xiiSpain BarcelonaThe second quarter of 2011 saw Ciutat Vella drop slightly steady in sale s pr ice s and se e n(13.1/m2) as did Sant Gervasi (12.3/m2) while Les Cortsincreased slightly (12.0/m2) on average prices from thesom e i ncre ase s in re nt al pr icefirst quarter.f or exc lusive prop e r tie s lo ca- 2,100,000Figure 8: Monthly Average and Maximum Rental Pri-ces ( per m2) for Barcelona July 2010 - June 2011ted i n the ce ntre of Barce lona.Th e rel ative lack of supplyan d h i gh le ve l of de mand forqual i t y lux ur y apar tme nt s andh ouses w ill me an t hat pr ice si n th i s se gme nt of the mar ke twi l l remain stable. We pre dic tOld Town ApartmentSpain Barcelonath at f o r t he imme diate fut urebuyers w ill b e able to se cureBarcel o na prop e r t ie s at comp e - 1,300,000Barcelona Short-term Rental MarketBarcelona airport saw an increase of 20.6% in passenger ti ti ve p r ice s. Give n t he cur re ntarrivals for the first half of 2011, one of the highest in-creases recorded amongst the major European airports, econ omic condit ions and lackwith over 15 million passengers arriving at El Prat airport of f i n ance available to lo calin the first half of the year (Figure 9)xiii. Between Februa-ry and April 2011, Barcelona was the 7th most searchedbuyers, inte r nat ional clie nt stravel destination amongst UK internet users.sh oul d b e w illing to hold on toTourism growth in Barcelonas province, Catalua, has th ei r prop e r tie s for longe r as itbeen consistently strong all year. Tourism data is cur-wi l l b e se ve ral ye ar s b e fore the rently only available for the first quarter of 2011, whichAlex VaughanStijn Teeuwenshowed an increase of 2.5% in foreign visitors on 2010n ex t grow th c ycle .DirectorDirectorfigures. Belgium, Netherlands and Switzerland visitornumbers grew substantially.Tourism levels impact on the short-term rental market,as tourists seek accommodation while visiting Barce-- Pred ic t s Luc as Fox ,lona. Tourism drives the need for short-term rental pro- Direc tor, Alex Vaughan.perties for visitor accommodation. Figure 9: Barcelona Inflight Arrivals July 2011_____________________________ Anthony Leatoni Idealista Evolution of monthly sales prices 2010 & 2011iiKyero Housing Price Index Marketing Directoriii NIE Statistics on property transfer rights, monthly provisional dataivIdealista Evolution of monthly sales prices 2010 & 2011vhttp://www.idescat.cat/economia/inec?tc=3&id=0201&lang=enviIdealista Evolution of monthly sales prices 2010 & 2011vii http://www.fomento.gob.es/MFOM/LANG_CASTELLANO/vii ESTA