Confidence is returning to Barcelona’s property market following a stuttering period after the October 1 independence push in 2017.
That’s according to the first quarterly results from Spanish property experts Lucas Fox, with sales by Lucas Fox Barcelona during the first three months of 2019 more than tripling compared to the same period in 2018. The average price also increased by 9% to stand at €997,675.
Additionally, the total value of sales transactions by Lucas Fox Barcelona also more than tripled, while the number of ‘New Development’ sales was more than six times greater than the number of sales in the same time period in 2018.
Just under three quarters of all Lucas Fox Barcelona sales in the first quarter of 2019 were accounted for by international buyers, roughly the same proportion as in the same in period in 2018. British buyers made up 12% of these purchasers, while American buyers accounted for 15% of sales in Barcelona. The number of Middle Eastern buyers rose, now representing 14% of all buyers in the tourist hotspot.
In the prime market (for properties worth more than €900,000), national buyers accounted for nearly a quarter of all Lucas Fox Barcelona buyers, while 15% came from the UK, 8% from the US and 23% from other European countries.
“Barcelona offers much more than a traditional resort location or indeed major city,” Lucas Fox co-founder Alexander Vaughan said. “It appeals to a younger, affluent buyer for a myriad of reasons – from its scores of Michelin-starred restaurants to its growing reputation as a FinTech hub.”
He added: “Developments like the Barcelona Mandarin Oriental Residences, a scheme of 34 luxury apartments and penthouses on Paseo de Gracia, are attracting a lot of interest and are an indication of where the market is heading. We've definitely seen an increase in enquiries and offers for prime properties since the middle of 2018 and so far 2019 is looking very positive.”
“The two very encouraging signs are that Catalan Family Offices are starting to invest in residential property and the number of major international companies that are establishing operations in areas like 22@ in Poblenou is increasing.”
Matching recent trends, most Lucas Fox Barcelona buyers purchased property for investment purposes (54%), while 20% bought property as a primary residence and 19% as a secondary residence.
In the prime market, meanwhile, the majority of Lucas Fox Barcelona buyers purchased either for investment purposes (38%) or as a primary residence (31%). Those buying a home as a secondary residence accounted for 15%.
Thanks to the city's changing demographic, the number of rental transactions completed by Lucas Fox Barcelona in the first quarter of 2019 rose by 10% year-on-year, averaging €2,294 per month.
Will Braem, rentals manager for Lucas Fox Barcelona, said the city is increasingly attracting a more dynamic workforce, lured in by growing numbers of innovative, well-funded start-ups and leading tech companies. This includes Amazon and Facebook, who have established operations ‘in what is fast becoming Europe's Silicon Valley’.
Braem insisted this is pushing up demand for good quality rentals in prime locations, which he said is good news for owners looking to earn a healthy rental income from their investments.
Elsewhere in Spain, the start to 2019 saw brisk sales for Lucas Fox in Madrid and Valencia, as well as its Costa Brava and Girona office, where 22% of all buyers were British.
“The positive market trend we saw in 2018 has continued in 2019, reflected in some excellent Q1 results in both Girona and the Costa Brava,” Tom Maidment, a partner at Lucas Fox Costa Brava and Girona, commented. “The volume of closed sales rose by 13% with local buyers accounting for a third of sales and French and British buyers each accounting for just under a quarter of all sales. With a very healthy pipeline of business, we expect the year to continue on a positive upward trend.”
The latest data suggests that overseas buying activity is also now returning to pre-financial crisis levels. In 2018, nearly 65,500 homes were sold to foreigners, representing 12.6% of total sales, according to data from the Spanish Property Registry. This is approximately the same number of homes that were sold to foreigners in the peak of 2007 (before the credit crunch took hold) and almost 5,000 more than were sold in 2017.