Barcelona’s real estate market two months after the independence referendum
On October 1, 2017, an independence referendum was held in Catalonia in which 90% of voters chose separation from Spain. How has the local market reacted to the events?
Fall in Demand
The Spanish Property Insight web portal quoted a real estate agent as saying, “The number of foreign buyers in Barcelona fell from a record level in September to zero in the first two weeks of October”. Bloomberg reported, citing Idelista
Clients who applied before October 1 fall into three groups: 1) those who have already been living in Spain and are looking for residential property for themselves, and are continuing their property search; 2) investors who have refocused from Barcelona to Valencia or Germany; and 3) those who had already had doubts and insufficient motivation to make a purchase – they are now avoiding any deals on because of the uncertainty in Catalonia.
Buyers looking elsewhere
The focus of many foreign buyers has shifted from Barcelona to Valencia. “Previously, if customers hesitated between Barcelona and Valencia, 80% of them eventually chose Barcelona because it has better traffic and is three times larger in size. Now
According to Spanish Property Insight, which cited Lucas Fox, there was a 20% plunge in demand for property in Catalonia in October, while demand in the rest of Spain grew by up to 38%, with the strongest growth coming from Madrid (+45%) and Valencia (+42%). According to the source, there was
Tightening mortgage lending rules
According to real estate appraiser Tinsa, the total number of mortgage loans issued in Catalonia fell by 10% in October unlike the rest of Spain where this number was growing. As before, banks continue to issue mortgage loans to residents for up to 90%
Decline in tourist numbers
Aecos, the Spanish largest business association, estimates that tourist arrivals in Barcelona may fall by about 20%. Hotel occupancy is estimated to fall to 80% as tourists are now thinking twice before booking a hotel room, Bloomberg reported, citing a local trade association.
According to data from global hospitality industry analyst STR, the first five days after the referendum saw a dramatic reduction in revenue per available room (RevPAR). The record low of -27.5%,
As for hotel occupancy, the only marketplace in Barcelona reporting growth between August and September was Sants-Montjuïc (+0.4%, according to STR). However, that was due
“From early October there were massive group booking cancellations involving 10 and more hotel rooms”, Javier Serrano, STR area manager (Spain and Portugal), said. “Since the beginning of the political unrest, all performance indicators have been poorer for Barcelona. This will adversely affect hotel occupancy through the end of the year and, in turn, may lead to reduced booking prices in the months to come.”
Most market participants share the view that while local buyers are still making deals, the demand for Barcelona property from abroad is declining. Some investors have shifted their focus to Valencia and other regions of Spain. However, it is too early to draw any conclusions, as many analysts believe that it will take at least a few months to come up with a more accurate estimate.
Originally published on spanishnews and spainbuddy
Yulia Kozhevnikova, Tranio