As markets can differ wildly based on location, I will feature in this blog several regions that are popular among consumers. This time we will have a look at Barcelona, the region for where I am mostly working at the moment.
Barcelona has been a real touristic hotspot since a long time, tourist from all over the world come to the famous beaches and the beautiful skyline. The city adapted to this economically and changed its city to the needs of tourists. The city counts over 400 hotels and has seen over 30 million tourist in 2019, enjoying the things the city has to offer.
However, with Covid-19 the 'tourism rules', have changed and it is hard to be accurate about the numbers. Here are some general trends that we see in 2020;
Rental prices in Barcelona are already high and there is low potential growth. Even though prices in other European cities are higher, their limit is related to salaries. Salaries in Barcelona are much lower compared to similar cities and the potential growth rate for this is very low.
In contrast to rental prices, is the sales market fluctuating and very active, the fastest-selling properties are in the 400.000 euro range. In addition, new properties sell 26% above the prices of second-hand properties. This often happens because developers are overpromising on the returns that investors get when they purchase these new properties. So, be careful with new properties!
Barcelona, city
In general, the market in Barcelona is slowing down in sales, shutting down options for new investors. This is mostly, because of the high transaction costs and several laws the Government introduced.
There is also good news, thanks to the socialist government now leading Spain, we will see the implementation of rent controls in the regions that choose to adopt these. So, even though there are positive changes, it is still possible that regions don't adopt to it. It is however, expected that Barcelona will implement these changes.
Be aware that the real estate market is not the same as everywhere, it is often hard to find information about for example, the previous owners, pricing etc.
A good rule to keep in mind is that the final price on properties should be 7-12% below the quoted price portals. With Covid-19 this could rise to 10-15%.