A decrease in the average price of a rental home in Barcelona has given a boost to the city’s rental market, according to the latest data from Lucas Fox.
The company’s Q1-Q3 2018 Market Reports show that the number of rental transactions completed by Lucas Fox Barcelona in the first nine months of 2018 increased by 36%, compared to the same period in 2017. Rental prices averaged at €2,305 per month, down 13% on the average price in the same period during 2017. The majority of Lucas Fox Barcelona’s foreign rental clients were from the United Kingdom, Germany, Russia and the Middle East.
Barcelona’s rental prices stabilising
Figures from property portal Idealista depict an annual decrease in Barcelona city’s average rental prices of 5% at the end of the third quarter of 2018, ending on €17.3 per square metre. The fall in prices were most notable in the prime districts such as Eixample where they were down by 9% to €17.7 per square metre as well as in Gràcia where prices decreased by 7% to €16.5 per square metre and in Barcelona Old Town where prices were down by 3% to €19.1 per square metre. The areas of Nou Barris and Horta Guinardó saw the biggest increases in rental prices of 8% and 5% respectively.
“There has been a readjustment in rental prices in Barcelona which were beginning to be beyond the reach of many residents,” explains Lucas Fox’s Managing Director Rod Jamieson. “The cost of living is continues to be lower than that of many other major European cities, not to mention the huge lifestyle benefits, and so Barcelona continues to be a major lure for foreign entrepreneurs and professionals. For property investors, the Catalan capital also remains an extremely attractive proposition with rental returns of up to 5% in uber prime districts.”
Growing UK and US demand for rentals in Valencia
The rise in the number of rental transactions completed by Lucas Fox Valencia in the first nine months of 2018 was even more significant – up by 76%, compared to the same period in 2017, with the price averaging at €1,816 per month. Most of the foreign rental clients were either from the United Kingdom or the United States.
Idealista figures show that average rental prices in Valencia city were up by 10% at the end of the third quarter of 2018, at €9 per square metre, compared to the end of the third quarter of 2017. The sought-after area of Puerto de Sagunto saw rental prices rise by 21%, ending the third quarter on €5.6 per square metre.
Strong foreign demand for rentals in Madrid
Lucas Fox Madrid launched their rentals division at the end of 2017 and business has been brisk, mainly due to high demand from international clients. The average monthly price of a rental home for the first nine months of 2018 was €3,279, significantly higher than that of Barcelona.
Idealista shows an annual increase in average rental prices in Madrid city of 7% at the end of the third quarter of 2018, ending the quarter on €16.4 per square metre. Average rental prices in the prime areas of Centro (which includes the neighbourhoods of Sol, Justicia and Cortes), Chamartín, Chamberí and Salamanca ended the third quarter on €19 per square metre (3% annual increase), €16.7 per square metre (4% annual increase), €18.2 per square metre (7% annual increase) and €19.1 per square metre (6% annual increase) respectively.
“Spain’s top three cities are attracting millenials keen to get involved in their burgeoning start-up scenes,” comments Lucas Fox’s Head of Rentals Shirley Rhodes. “In Barcelona Amazon, Facebook and Google all have offices in the city, a scenario that would have been unthinkable just ten years ago. Meanwhile in Madrid, the low cost of living, the great quality of life, the entrepreneurship visa programme and premier institutions like the IE Business School and Google campus, make Madrid a great start-up destination. Valencia’s low rents for housing and office space has meant it has also become an exciting start-up hub, attracting a large pool of affordable talent thanks to its local business schools.”
Lucas Fox average property price up
With regards to Lucas Fox’s sales, the average price of a property sold in the first three quarters of 2018 increased by 9%, to €847,189, when compared to the same period in 2017. The volume of prime sales (those above €900,000) across all regions went up by 31% year-on-year.
Official figures by Spain’s Institute of Statistics show a continued recovery of the Spanish property market with 352,768 properties exchanging hands in the first eight months of the year, an increase of 11% over the same period in 2017. The number of new homes in the first eight months of 2018 showed a similar growth (a 12% rise), with 62,318 new homes being sold across Spain, representing 18% of the total sales, a similar proportion to the same period in 2017.