Investors are recovering their optimism for buying properties in Barcelona, with demand back on the rise.
Political upheaval in Catalonia, that exploded in October and reached global coverage, has led to negative reporting for the region’s economy. Thousands of companies have relocated their headquarters from Catalonia to the other areas of Spain and, as it was expected, investors’ confidence decreased and the property market has suffered certain consequences.
However, the data now seems to show that a lot of these effects were temporary and reactionary. Recovery is underway as the situation begins to stabilize. In November Barcelona YoY housing sales figures, recorded in the Land Registry, have recovered strongly from the previous two months, as you can see from the following two charts that were released by Spanish Property Insight.
December’s diagrams will tell if this pattern is continuing, but with rental prices in Barcelona recently rising to the highest levels in history, it appears that the demand for property is surely not going down and is still stronger than ever.
Change in property demand since the independence drive
In the final quarter of 2017, foreign demand for the property did stagnate slightly in response to the political crisis in the region. This drop in demand was mainly due to the concern that Catalonia might eventually leave Spain (even the EU) after the unilateral declaration of independence.
This didn’t happen but the uncertainty did influence on confidence. However, as you can see from the earlier data, the trust is coming back.
Impact on property prices
The political crisis may have been dramatic but it has also been short-lived.
The initial data – like the figures shown earlier in this post – seems to show not a drop but just a temporary dent in the rate of growth relative to the rest of Spain, where prices have risen 6.7% year-on-year in the final quarter.
Now that things are getting back to normal, growth is catching back up.
Our prediction of demand evolution throughout 2018
With historically still-low property values in Spain, the pattern that’s emerging is for strong and renewed growth in Catalonia – aligned with the rapid growth in the rest of Spain.
It all depends on how the politics evolve, but with the Spanish Central Government possessed with legal mechanisms to control the situation in Catalonia, things are very unlikely to spiral out of control.
And what we have noticed so far this year, is that demand is coming back increasingly. Foreign investors are confident now that a constitutional solution will be found, and uncertainty is diminishing, so they are coming back to the market.
Good time for investment
Based on all we’ve said, it is now! Actually, another way to view things is that with prices being a bit lower than they would normally be (and will be in the future after a full recovery) it’s a great window of opportunities to buy.
Knock-on effect for the rest of Spain
As you’d expect – some regions have seen increased financing from investors who may have moved their interest from Catalonia to areas such as Valencia, Malaga, and Madrid. Valencia, in particular, is experiencing a surge in demand.
Spain remains a great place for investors to buy property at the moment – regardless of any political issues.
IMPROVE your confidence in Barcelona Property Investment!
There are several pitfalls to avoid during the process, so it certainly pays off to work with professional experts in law and finance when buying any property in Barcelona, or elsewhere in Spain.
Here at Improve Advisors, we use a lot of time and effort to analyzing your needs and expectations whether it shall be a place to enjoy and live the Mediterranean lifestyle or a pure investment with specific expectations with a short or long-term ROI. We have established excellent and exclusive relations to key contacts in Barcelona, which enable us to talk directly with investors who are on market with various needs of funding and circulation of assets.