How would you sum up the property market in Barcelona during 2016?
The property market in Barcelona has continued to grow significantly during 2016 and there has been a notable increase in transactions of New Development properties. The availability of high-end luxury renovated apartments in the Eixample and Ciutat Vella districts of the city has definitely been a driving force with international buyers looking for investment and second home properties. The local market has also seen increased activity as the Spanish economy recovers and financing becomes readily available. During the period we witnessed an overall stabilising of property prices and in some highly sought districts saw double digit growth. In the last quarter Lucas Fox experienced a sharp increase in transactions closed to end a positive year.
How does it compare to 2015?
In 2015 we saw the early stages of New Development projects in process of becoming available on the market, which later accelerated during 2016, increasing the supply of much needed product in high demand. Interest for Barcelona as a place to invest remained steady from international buyers, many of whom are known to be lifestyle investors.
What are the notable trends?
The area of Eixample Right has been the central district of the city that saw the most growth in demand and price increase, mainly due to a limited amount of exclusive high-end renovation projects being developed. These properties include unique Modernista style buildings with top notch fixtures, fittings and amenities. Sales prices have reached as high as €15,000/m² in some transactions.
There has also been increased demand for the Gothic and Born districts, where much investment in urban renewal have been realised in recent years. The availability of transformed historic buildings with stylish apartments has been and continues to be a success. The main motivation for buying in these areas is for second home and investment. Another district to watch out for is Diagonal Mar, which is becoming once again very popular with large residential projects. Properties are mainly being bought for pure investment purposes as potential rental yields are higher than average. These types of investment properties are in demand by Middle Eastern and Asian investors interested in obtaining the residency visa.
What have been the main challenges?
The main challenge still is having enough quality product available to meet the demand of our clients. Although the increased New Development activity is satisfying a part of this demand, there is still a shortage of reasonably priced high quality product in central locations of the city.
What types of properties are proving most in demand?
The most sought-after properties selling are apartments in attractive renovated buildings, with 2 to 3 bedrooms, 2 bathrooms, from 80m² to 150m², in prime locations as mentioned above and priced between €700,000 and €1.5 million. Also smaller apartments of around 50 to 60m² with 1 to 2 bedrooms for rental income investment for around €500,000 are increasingly in demand for Golden Visa seekers.
What do you expect will be the key trends for 2017 in Barcelona?
The Barcelona property market continues to attract investors from all over the world, thanks to its exceptional lifestyle and investment potential. In 2017 we expect New Development project sales to drive the residential property market in Barcelona. There are a number of bench marks pushing developments located in prime areas of the city that are certain to attract international lifestyle investors. We expect prices in the city centre to continue to increase, possibly into the double digits. Other larger projects that should come to market in the first half of 2017 are located in the areas of Left Eixample, Diagional Mar and Poble Nou. They are perfect rental investments and will also attract non-European buyers looking to take advantage of the Golden Visa residency scheme. Our prediction is that sales in these developments will make up a high percentage of the mid-market transactions realised by foreign buyers. We predict further growth in the national market, more specifically in the Zona Alta, as the economy recuperates and financing becomes more accessible. We believe that Barcelona, along with Madrid and Valencia will continue to be investment hotspots for the year to come, and capital gains growth will be consistent throughout.