Three reasons the time is now to invest in Barcelona real estate
Investors are flocking to the Barcelona property market with increasing fervor.
The city has rebounded from the 2008 global financial crisis, and its property market now boasts a wealth of favorable investment conditions.
Demand exceeds supply.
The potential for price growth is huge.
More and more tourists are swarming the Catalonian capital with each passive year, boosting rental demand.
We could go on about the perks of the market, but there are three key reasons why we believe this is the perfect time for property investors to snap up Barcelona properties:
1. High demand in the
Demand in Barcelona’s central districts is driven mainly by international investors snapping up
According to data released by Barcelona’s City Council,
The same source revealed that international buyers accounted for 14% of all property purchases in Barcelona during the second quarter 2016; in the
However, in certain districts of Barcelona foreign purchasers far outnumber their domestic counterparts. For instance, global real estate firm, Engel & Völkers reported that foreigners comprise 75% of purchasers in the districts of Eixample and Ciutat Vella. The remaining quarter include Barcelona locals (15%) and other Spanish nationals (10%).
According to City Council data, during the first two quarters of 2016, Barcelona granted a total of 655 building licenses — a 50% increase compared to the same period in 2014.
Analysts from the American real estate firm CBRE Group estimate that the city’s
2. Surging prices with a room to grow
Price growth in Barcelona is outpacing that of the rest of the country. This may owe to the fact that while Barcelona reached its
Across Barcelona, high demand is driving up property prices, which have increased by an average of 21% since 2013. According to leading Spanish property site Idealista, property for sale in Barcelona was selling for an average of €3,667 per square metre during the third quarter of 2016.
Of course, the average is considerably higher in the city’s most sought after districts. The prices of new and refurbished properties on the best streets of Eixample, Ciutat Vella and Sant Gervasi range from €5,000 to €15,000 per square metre, according to Engel & Völkers.
On average, apartments in the Catalonian capital cost less than half as much as those in Paris and Munich, and are about 3.5 times cheaper than those in London.
Prices in Barcelona are still some 26% lower than they were in 2007, when property values peaked ahead of the global financial crisis. This indicates enormous price growth potential and many lucrative opportunities for speculative investors eyeing redevelopment projects.
3. A wealth of promising rental opportunities
Rental prices in Barcelona are also growing. According to the City Council, in 2014 rental prices in the city dipped to
Savvy investors are increasingly opting to put their Barcelona properties on the
According to data obtained from industry leader Airbnb — users pay an average of €100 per night for Barcelona
Most tourist rentals are located in the Ciutat Vella (in particular: Barri Gòtic, El Raval, La Ribera, Santa Caterina and Sant Pere) and Eixample (in particular: Dreta de l'Eixample).
What’s next for Barcelona?
Low mortgage rates are among the key drivers of market growth in Barcelona. Spanish banks provide
During the financial crisis, the lending market froze, but as soon as financial institutions in Spain resumed providing loans, Spaniards resumed actively investing in property. This process was helped along by the European Central Bank’s (ECB) quantitative easing policy, which increased EU bond purchases and poured money into European financial institutions.
In theory, property demand in Spain and Barcelona would most likely decrease if mortgage rates were to rise. However, judging by the fact that the European Union’s gross domestic profit is growing at a rate of
Furthermore, prices of property for sale in Spain are expected to surge by 20% between 2016 and 2020, and Barcelona’s price growth is expected to continue to outpace that of the rest of the country during that period, according to website Trading Economics.
In May 2016, alternative investment firm Aquila Capital surveyed 64 institutional investors, 69% of whom opined that Barcelona is the best Spanish city for residential property investments.
For all of these reasons, we at Tranio.com believe the time is now to cash in on this burgeoning market.
George Kachmazov and Yulia Kozhevnikova, Tranio.com
Originally published on spainbuddy.com