BARCELONA REAL ESTATE MARKET REPORTQ1 & Q2, 2011 RELEASED AUGUST 2011
This Barcelona real estate market report has been developed by Lucas Fox International Properties to provide investors, property owners, 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 exclusive properties that will retain their value over the years ahead, while providing a quality base for living part or full time or operating a business in the most cosmopolitan of world cities. If you are serious about owning property in Spain, the current market presents a good 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
Nationally, the Spanish housing sector and property market has continued its downward trend, although not as steeply as was the case in other housing mar-kets such as the US. Despite this, the luxury property market in Barcelona and in other key Spanish loca-tions (see our Market Reports for other areas) has dis-played some resilience. This reflects a global trend in both luxury property sales and more broadly in the luxury consumer market.
In Barcelona, after a small start-of-year drop in maxi-mum 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, there was a continuing dip in housing prices ( Figure 1)i. However, in Barcelona average asking prices for
house sales were on average much higher than in Spain overall. For the first half of 2011 average sales were 166.6% higher than the Spanish property av-erage (€ 236,000) (Figure 2)ii & iii .
The small month-to-month drop in average prices has led some property analysts to suggest that the market is bottoming out, while more bullish analysts have been suggesting that the environment is ideal for strategically picking up property investments at low prices. Other analysts have noted that with Spanish banks still holding onto large amounts of property assets and an uncertain eco-nomic environment, some further price adjustment downwards is to be expected.
At Lucas Fox, the first half of 2011 has seen a high level of demand for luxury Barcelona real estate, in
particular for apartments in Barcelona city centre suitable for tourist rentals and villas in the city and on the coast. This is in contrast to the situation with property sales of average properties, which saw a lackluster second quarter (Figure 3).
”The slowdown in Barcelona property sales at the lower end of the market is partly due to the introduc-tion of new mortgage taxation laws but also due to the lack of finance available to local buyers,” says Alex Vaughan, Director, Lucas Fox Barcelona.
Figure 1: Average and Maximum Euro Price (in ’000s) per m2: Spain and Barcelona July 2010 - June 2011
Figure 2: Average Asking Prices for House Sales (in ’000s): Spain and Barcelona July 2010 - June 2011
”
“ The relative lack of supply and high level
of demand for quality luxury apartments and houses will mean that prices in this segment of the market will remain stable
Alex Vaughan, Director Lucas Fox Barcelona
Barcelona Property PricesThe first half of 2011 showed a drop in average Euro price per m2 for Barcelona real estate to €3,752 per m2. Maximum property prices remained steady at €4,888 per m2 for the full half year. New housing construction remained subdued.
Q1 2011Salesiv: Sales prices for all of Barcelona averaged at €3,907 per m2, a fall of 3,4% on sales figures from the end of 2010 when prices averaged €4,046 per m2 (Figure 1). Maximum prices were recorded in Sarria-Sant Gervasi (€6,035 per m2) and Les Corts (€5,657 per m2), with the most exclusive properties in Eixample reaching €5,293 per m2.
Constructionv : Construction of new properties in Ca-taluña, including Barcelona, remained low for the first three months of 2011(Figure 4).
Q2 2011Salesvi: The year’s downward trend continued in the second quarter of 2011, with average sales prices hit-ting €3.752 per m2 by the end of June. There was a 4% variation drop in average prices overall (Figure 5) maintained the first quarter levels.
Constructionvii: Construction figures for new Barcelo-na properties forms part of the overall Cataluña sum-mary results. These are expected to be released by the Idescat on 29 September, 2011.
Foreign Investment
2011 has seen increased interest in Barcelona and Ca-taluña property from non Eurozone property inves-tors. Demand from Russian and former Soviet buyers has been strong – figures show that the large number of Russian households with a high level of cash assets 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 in second homes and commercial properties in Barcelo-naviii. Russian property investment is set to be replica-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.
UK market80% of UK residents want to buy Spanish
property for their retirement
European market: Netherlands and Switzerland show
interest
Russian market: 1 million+ households with $425K cash assets
Figure 5: Barcelona property price quarterly variation between Q1 and Q2 2011
4,7%4,2%
3,3%
7,1%
2,2%
3,1%
4,6%
Figure 6: Lucas Fox Top 11 website visitors by country for January - June 2011
Figure 7: 2011 international drivers of current Barcelona foreign property investment trends
Figure 3: Barcelona and Spain Urban Property Sales Transactions January - May 2011
Figure 4: Cataluña and Spain Housing Constructions Commenced January 2011 - April 2011
During Q1/Q2 2011 we have enjoyed a 96% in-
crease in web site visitors over Q3/Q4 2010. Most interestingly we have recorded a rise of 300% with Russian clients in the two last quarters. As an agency, we have seen a 230% rise in qualified enquiries from Russian property investors and buyers. With a high level of enquiries and interest from other emerging markets and our traditional client base the first half of 2011 has been anything but bleak.
Anthony Leaton,Marketing Director
“
”
Barcelona Rental PropertyAverage rental prices (Figure 8) for Barcelona properties dropped slightly (-0.2% variation) between the first and second quarters of 2011, from €12.1 per m2 to €11.7 per m2x.
Q1 2011 xi
Ciutat Vella (€13.5/m2) had the highest rental prices, with Sarrià-Sant Gervasi (€12.4/m2) and Les Corts (€11.9/m2) also high.
Q2 2011 xii
The second quarter of 2011 saw Ciutat Vella drop slightly (€13.1/m2) as did Sant Gervasi (€12.3/m2) while Les Corts increased slightly (€12.0/m2) on average prices from the first quarter.
Barcelona Short-term Rental MarketBarcelona airport saw an increase of 20.6% in passenger arrivals for the first half of 2011, one of the highest in-creases recorded amongst the major European airports, with over 15 million passengers arriving at El Prat airport in the first half of the year (Figure 9)xiii. Between Februa-ry and April 2011, Barcelona was the 7th most searched travel destination amongst UK internet users.
Tourism growth in Barcelona’s province, Cataluña, has been consistently strong all year. Tourism data is cur-rently only available for the first quarter of 2011, which showed an increase of 2.5% in foreign visitors on 2010 figures. Belgium, Netherlands and Switzerland visitor numbers grew substantially.
Tourism levels impact on the short-term rental market, as tourists seek accommodation while visiting Barce-lona. Tourism drives the need for short-term rental pro-perties for visitor accommodation.
Lucas Fox Analysis and Prediction for the Second Half of 2011
W h i l e t h e f i r s t h a l f o f 2 0 1 1 h a s s e e n f u r t h e r
d r o p s o n ke y h o u s i n g i n d i ca -t o r s i n B a r ce l o n a , t h e l u x u r y e n d o f t h e m a r ke t h a s h e l d s t e a d y i n s a l e s p r i ce s a n d s e e n s o m e i n c r e a s e s i n r e n t a l p r i ce f o r e xc l u s i v e p r o p e r t i e s l o ca -t e d i n t h e ce n t r e o f B a r ce l o n a . T h e r e l a t i v e l a c k o f s u p p l y a n d h i g h l e v e l o f d e m a n d f o r q u a l i t y l u x u r y a p a r t m e n t s a n d h o u s e s w i l l m e a n t h a t p r i ce s i n t h i s s e g m e n t o f t h e m a r ke t w i l l r e m a i n s t a b l e. We p r e d i c t t h a t f o r t h e i m m e d i a t e f u t u r e b u y e r s w i l l b e a b l e t o s e c u r e B a r ce l o n a p r o p e r t i e s a t co m p e -t i t i v e p r i ce s. G i v e n t h e c u r r e n t e co n o m i c co n d i t i o n s a n d l a c k o f f i n a n ce a va i l a b l e t o l o ca l b u y e r s , i n t e r n a t i o n a l c l i e n t s s h o u l d b e w i l l i n g t o h o l d o n t o t h e i r p r o p e r t i e s f o r l o n g e r a s i t w i l l b e s e v e ra l y e a r s b e f o r e t h e n e x t g r o w t h c y c l e .
- Predic ts Lucas Fox, Direc tor, Alex Vaughan.
_____________________________iIdealista Evolution of monthly sales prices 2010 & 2011iiKyero Housing Price IndexiiiNIE 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 & 2011viihttp://www.fomento.gob.es/MFOM/LANG_CASTELLANO/viiESTADISTICAS_Y_PUBLICACIONES/INFORMACION_ESTADISTICA/Calen-dario.htmviiihttp://blog.lucasfox.com/commercial-property-2/spain-retail-european-property-market/ixBoyd, M. (2011) Barcelona Luxury and the Affluent Travel Consumer: Audience Profile Market Research Report, mgboyd.com. August 2011.xhttp://www.idealista.com/descarga.jsp?archivo=anio_alquiler_2010.pdf&origen=C03xiIdealista Evolution of monthly rental prices 2011xiiIdealista Evolution of monthly rental prices 2011http://www.aena-aeropuertos.es/csee/ccurl/899/599/07.Estadisticas_Ju-nio_2011.pdfhttp://www.hitwise.com/uk/registration-pages/quarterly-travel-reviewxiiihttp://www.idescat.cat/economia/inec?tc=3&id=5428&lang=en
Sitges – VillaSpain» Barcelona
€2,100,000
Old Town – ApartmentSpain » Barcelona
€1,300,000
Alex VaughanDirector
Stijn Teeuwen Director
Anthony LeatonMarketing Director
Figure 8: Monthly Average and Maximum Rental Pri-ces (€ per m2) for Barcelona July 2010 - June 2011
Figure 9: Barcelona Inflight Arrivals July 2011
”
“
