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Barcelona property market report

Q3 & Q4, 2010


Released May 2011

Lucas Fox provides regular updates on the Barcelona property market. This Barcelona property market report summarizes the state of the Barcelona real estate market in the second half of 2010. To prepare this report, we have drawn on national and city data, our business analytics, and the week-to-week experiences of our sales agents in the Barcelona luxury property market. This report shows that despite ongoing issues in the Spanish property market, the Barcelona market remains stable with strong foreign investment interest and some signs of recovery at the exclusive end of the market.

You can receive up-to-date market reports from Lucas Fox. Subscribe to future updates at our website (www.lucasfox.com) or bookmark our blog (www.blog.lucasfox.com) for the latest news on Barcelona real estate. For any questions about Barcelona property, please contact us by email at info@lucasfox.com on 0034 933 562 989.

The Barcelona Property Market


The special characteristics of Barcelona property create a different local property market than that apparent from national housing figures. The second half of 2010 showed a stabilizing of the Euro price per m2 for both Barcelona property, and for the Spanish property market more broadly (Figure 1)i. However, this is in contrast to one independent data agency that reported a strengthening in the asking price of Barcelona properties, when compared with the national average (Figure 2)ii. At Lucas Fox, we are seeing a pattern more similar to the data findings in Figure 2, confirms Director, Alex Vaughan. Barcelona luxury property trading remained solid for the second half of 2010 with a particular improvement in the number of transactions in the last quarter. Vaughan explains the appeal of Barcelona property: Many of Lucas Fox's clients have the enviable Lucas Foxs clients position of being choose Barcelona due to able to choose to live or purchase the quality of life that the anywhere in the city offers. Barcelona world but decide on properties reflect a Barcelona due to slight strengthening in the quality of life that the city price and market offers. Normally this stability. Alex Vaughan, Lucas Fox Director comes down to a combination of the Mediterranean climate, Spanish culture and gastronomy, and the fact that it is a very safe place to live with a real sense of community, While the official figures show that Barcelona property prices increased marginally, the number of sales remained steady throughout the six month period, in contrast with much more volatility in the level of transactions across the Spanish property market as a whole (Figure 3)iii.

Fig. 1: Monthly averages and maximum prices (000 per m2) for Spain and Barcelona July December 2010 (Source: Idealista
Evolution of monthly sales prices 2010)

Fig. 2: Average asking sales prices in 000 for Spain and Barcelona July December 2010 (Source: Kyero Housing Price Index)

Fig. 3: Monthly total property sales 2010


(Source: INE, Statistics on transfer of property rights, provisional monthly data)

The comparative steadiness of the Barcelona property market is testament to the backing of local Catalan and international property buyers who believe in the longer term future of the market in Barcelona. Overall, Barcelona properties are showing greater market stability than is evident from an assessment of the national picture.

Barcelona Property prices


The sales prices of Barcelona properties remained fairly steady for the second two quarters of 2010, with a drop in average floor prices between July (4.131 per m2) and the end of the year (4.046 per m2). This is a reduction in property value equivalent to 0,85 per m2. Q3 2010 During the third quarter, average sales prices for Barcelona remained steady, sitting at 4.065 per m2 at the end of the quarter. Average prices per square metre sat at 5.000 Euro per square meter in the most exclusive districts of Barcelona including Sarri-Sant Gervasi (5.101/ m2) and Les Corts (5.026/ m2), with Eixample averaging 4.407/m2. Q4 2010iv There was only -0,5% sales variation between the third and final quarters of the Barcelona property market in 2010. City averages sat at 4.046 per m2. In the exclusive areas of Sarri-Sant Gervasi (5.128/ m2), prices rose over third-quarter averages, with Les Corts prices increasing by 0,9% to 5.076 per m2 at years end. The Barcelona district of Sarri-Sant Gervasi had the maximum sales price of 6.035 per m2.
5.657

4.229 6.035 3.886

4.896

4.410

4.759

4.733

Fig. 4: Barcelona property maximum district prices Q4 2010


(Source: Idealista summary report for 2010 by quarter)

Foreign investment
Only between 10 and 15% of property transactions in Barcelona involve foreign buyers. This is in complete contrast to property trends in other parts of Spain, for example the Costa del Sol, which has a large majority of foreign buyers. The main international groups of clients buying Barcelona property at present are from Europe, the United Kingdom, Russia and the USA. There is also a strong local market, with Catalan residents buying the bulk of property in the city. In 2010, real estate activities accounted for 17% of all foreign direct investment in Spain, adding 1.980 million Euros to the economy. In 2010, a total of 3.952 million Euros was added to Catalua, Barcelonas provincial region from gross foreign direct investment. Barcelona and the Catalua region receive a third v (34%) of all Spains foreign investment.
36,6% 8,2% 6,5% 45,8%

2.3%

0,6%

Fig. 5: Sources of 2010 total direct foreign investment in Spain (17% is attributed to the real estate sector). (Source: Invest in Spain
Direct Foreign Investment 2010)

Barcelona Rental Property


Average rental prices for Barcelona properties maintained a consistency across the second half of 2010vi . Properties for rent in Barcelona maintained an average of around 12,1 per m2. Q3 2010 Rental prices in Barcelona rose slightly by 0,6% for the summer quarter, but overall remained steady with an average rental market price of 12 per m2. Ciutat Vella (13,5/m2) had the highest rental prices, with SarriSant Gervasi (12,5/m2) and Les Corts (12,3/m2) also high. Q4 2010 The fourth quarter of the year saw a decrease in rental prices in most districts, cancelling out the slight gains of previous quarters. By years end, only Ciutat Vella (13,5/m2) and Sant Mart (12,3/m2) could record a rental price increase on their average prices 12 months earlier. The second half of the year saw the usual reduction in interest for Barcelona rental properties, as is typical for the local housing market at this time of year. The final quarter of the year is always the trough after the summer interest in the middle of the year, explains Anthony Leaton, Lucas Fox Marketing Director. Despite this, the numbers overall are higher than in previous years, reflecting a strong interest in Barcelona rental properties in 2010.

Fig. 6: Monthly averages and maximum prices (000 per m2) for Spain and Barcelona July December 2010 (Source: Idealista Evolution
of monthly sales prices 2010)

Fig. 7: Barcelona properties rental demand measured by level of web interest (Source: Lucas Fox data)

Barcelona Short Term Rental Market


The solid 2.000.000 arrivals for December 2010 was 7,9% higher than the previous Decembers figuresvii. Air traffic is a good indication of visitors needing short term accommodation in Barcelona. Growth in air traffic numbers indicates a strong tourist sector and subsequent demand for short-stay property options. The increase in in-flight arrivals of around 8% on previous years figures has been reflected in Lucas Fox seeing a far higher demand for short-stay Barcelona property rental than in 2009.

References
i
ii iii iv v vi
vii

Fig. 8: Barcelona inflight arrivals (Source: AENA Estadisticas Lllegadas Mes


a Mes 2010)

http://www.idealista.com/descarga.jsp?archivo=anio_2010_mensual_en.pdf http://prices.kyero.com/assets/kyero_house_price_index.pdf http://www.ine.es/en/daco/daco42/etdp/etdppro1210_en.pdf http://www.idealista.com/descarga.jsp?archivo=anio_2010_trimestral_en.pdf http://www.investinspain.org/icex/cma/contentTypes/common/records/viewDocument/0,,,00.bin?doc=4469127 http://www.idealista.com/descarga.jsp?archivo=anio_alquiler_2010.pdf&origen=C03


http://www.aena.es/csee/Satellite?SiteName=Estadisticas&anyo=2010&c=Page&cid=1144247795704&pagename=Estadisticas%2FEstadisticas&periodoInforme=Mensual