Barcelona is the Spanish city with the most dynamic real estate market. The proof of this claim is in the double-digit growth recorded during 2016, both in number of transactions and in price increases. Although the number of completions will maintain this frantic activity in 2017, prices will still increase by 9% in sales and 8% in the rental segment.
This is one of the conclusions drawn from the Barcelona Market Report 2017 prepared by the German firm, Engel & Völkers, which forecasts a double-speed growth in the coming years in Barcelona. The price increases in Zona Alta, Les Corts, Eixample, Ciutat Vella, Gracia and Diagonal Mar have historically been between 80% and 90% and they will reach their maximum in the next two years before easing off. The rest of the city's districts and the municipalities of the metropolitan area still have quite a long way to catch up since they are still between 50% and 60%.
The report, which is presented today by Oriol Canal, the general director of Metropolitan Market Centre (MMC) at Engel & Völkers in Barcelona, points out that: "although international demand remains intact, since last year it has increased to 60% in sales. A trend that will continue through 2017 ".
If 2016 has been the year of construction take-off for new developments, 2017 will be the new construction and renovation boom in Barcelona. This is a city that has consolidated among the great international real estate market as the ideal European capital to invest in.
The most 'premium' areas
Within the 'top ten' of Barcelona's most expensive neighbourhoods, Diagonal Mar has begun competing with the exclusive Zona Alta district. Although there are very few new build properties that go on sale in Pedralbes, they can reach 12,000 € / sqm. The price range in the most modern neighbourhood of the city ranges from 6,500 to 12,000 € / sqm.
Diagonal Mar, which used to be an industrial area and has since been transformed into one of the most premium areas of Barcelona, is highly sought by foreign families from different nationalities such as Russians, French, Bulgarians, Argentines and Americans. These international clients, who account for 60% of purchases, tend to look for spacious, bright, and modern properties with spectacular views within high-end residential complexes.
But foreigners also seek properties in other elegant districts such as Eixample, where the average price has risen to €4,900 / sqm. Last year, more than 30 different nationalities have been interested in modernist apartments and fincas in Eixample and Ciutat Vella, where a greater presence of renovated properties has been observed.
Behind these exclusive areas there are more bohemian neighbourhoods such as Gracia, where demand is focused on lofts and apartments. There is also a characterful area like Les Corts, where the most sought after types of properties are 100-130 sqm houses with garden. The average prices in both districts are around 4,100 euros / sqm and these are in line with those recorded in Font d'en Fargues.
The year of new construction and renovation projects
he shortage of supply in the centre of Barcelona due to lack of land has moved the new developments to the surrounding areas of Eixample. In this sense, Les Corts, Sants, Gracia Nova and Guinardó are the neighbourhoods where there are small new construction projects taking place, while the large ones are built in the metropolitan areas such as Badalona, Hospitalet de Llobregat and Cornellà.
It is worth mentioning the numerous renovation works in central areas such as Ciutat Vella, Eixample and Gracia where the buildings are protected and in some cases, even the interior features of fincas cannot be changed unless they are restored back to their original condition.
The objective for 2017: to sell one property a day
Engel & Völkers is already involved in the commercialisation of 60 new build offers and major renovation properties for sale and the goal for 2017 is to sell one apartment per day in this division.
The type of apartment that is sold in Barcelona, whether it is a renovated old apartment or a brand new flat, has two or three bedrooms with an area of about 84 sqm and a price of around 460,000 euros. The tendency is to have fewer rooms, but more spacious ones according to the demand of the buyer who also prefers to include a storage room and garage space. If the house is on top floor, the price increases by 20%.
Record prices in rentals
The rental market has accelerated in recent months due to the pace of sustained growth in Barcelona. Since 2007, rental prices have hit historic highs and seen increases of 14%. The growing demand for rental properties in the old town has placed the average price in Ciutat Vella at 16 euros / sqm, which is the highest in Barcelona followed closely by Les Corts.
In Barcelona, Engel & Völkers focuses its rental offers in the most sought after districts of the city: Sarrià-Sant Gervasi, Eixample, Ciutat Vella, Les Corts and Gracia. However, in the last year a growing demand has been observed in Diagonal Mar.
The tenant's profile is drawn by high-income families interested in prime locations or students who prefer more central areas, although the demand is evenly distributed among domestic and international clients. The latter are 80% European, mainly British, German and northern Europeans.
The most typical property that people seek to rent in Barcelona has to be of high quality finishes with more than 150 square metres, located near the international schools and with a price above 3,000 euros per month in Sarria-Sant Gervasi and around 2,000 euros per month in Eixample.
Commercial: quadrupling the business year after year
In its second year of business trading, Engel & Völkers Commercial, a division that is specialised in the sale and transfer of business premises, buildings, offices, hotels, industrial buildings and land, has quadrupled its operations in Barcelona since 2015 and the forecast for this year is to once again quadruple the 2016 volume.
If revenues from the sales have been close to 70% compared to the remaining 30% from rentals, in 2017, the forecasts are projected to reach 65% and 35%, respectively.
Regarding prices, it should be noted that, despite the increases of between 10% and 20%, both in individual houses and in buildings, Barcelona is still between 30-40% cheaper than other European capitals. It goes without saying that Ciudad Condal is another contributing factor for attracting the international investors.
The most sought after assets are, on the one hand, the residential buildings that are in need of renovation, where the investment is distributed evenly between national and international buyers, and, on the other, the commercial premises. The property price increases in Diagonal - Paseo de Gracia - Francesc Macià stand out by between 15% and 20% after the building renovations have been carried out in these areas.
This news has also been publish in the following newspapers online:
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