Demand for Luxury Homes Plummets in Barcelona & Soars in Madrid

23 November 2017 – Expansión

Since 1 October, demand for luxury homes has plummeted by 50% in Barcelona, with a 20% decrease in prices; meanwhile, demand has risen by 40% in the Spanish capital where prices have gone up by 10%.

Secessionism is sinking the Catalan real estate market due to the threat of uncertainty. “Demand for luxury housing has plummeted by 50% in Barcelona between 1 October and 15 November”, explains Emmanuel Virgoulay, Founding Partner at Barnes International in Spain. Whilst Barcelona falls, interest from buyers in these kinds of assets in Madrid is soaring by 40%, according to the real estate company that specialises in the premium segment.

“For every home for sale in Madrid, there are four buyers”. In Barcelona, by contrast, “the damage has already been done”, explained Virgoulay, referring to the unilateral referendum. That process has marked a before and after in the Catalan economy. The uncertainty has caused panic to spread throughout the markets, leading to the flight of more than 2,600 companies, causing the confidence of businessmen and consumers to collapse and paralysing investments. Housing, along with tourism, has been the most affected sector.

Before 1-O, Barcelona was enjoying its best moment since the crisis. The prices of high-standing properties were growing at a rate of 15%. However, since 1 October, the decrease in prices amounts to 20%. During the same month, the cost of these types of assets in Madrid has also moved by double digits, but in the opposite direction, with growth of 10%, like in the Balearic Islands. In Andalucía, the variation has been somewhat lower, between 5% and 10%, according to market sources.

In Barcelona, the rise in prices had generated a bubble. “Some owners were aligning the price of their properties with those in the most exclusive parts of other cities in Europe”, explained Virgoulay. However, investors “put the handbrake on” several months ago now. In October, there was a 50% decrease in the number of deeds signed for the sale and purchase of homes and mortgages, with buyers pulling out and preferring to lose their deposits, which can represent up to 10% of the purchase price, than going ahead with their purchases.

“Investors are going to come to Madrid because the market is safer”, explains Virgoulay. Currently, 57% of the luxury real estate acquisitions that are made in Spain take place in Madrid. The Spanish capital is the most attractive city for domestic and international investors alike. “The weight of the investor market is comparable with the market for primary residences”, he explains.

Looking ahead to year end, Virgoulay considers that, since the Government took action, with the application of Article 155, “the outlook is stable and demand has been starting to recover since 15 November”. But, 21 December is emerging as a new door to uncertainty “anything can happen once again”. Nevertheless, “Prices are going to rise, in general, but in Barcelona, it is clear that they are not going to evolve, they are going to fall”.

In Madrid, like in Barcelona, the average price of luxury housing amounts to €8,000/m2. In the Balearic Islands, where the main demand is from European buyers for second homes, the price per square metre amounts to €7,500/m2.

Barnes plans to open new offices in 2018 in locations such as the Balearic Islands and the Canary Islands. Cataluña was another one of its objectives, but, for the time being, no date has been set for that opening.

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake

Buyers Willing To Pay 30%-50% More For Homes With A View In Barcelona

19 December 2016 – Inmodiario

Good views are a key component of the appraisal value of luxury homes in Barcelona. They account for between 30% and 50% of a property’s value, depending on the type of skyline on offer, in such a way that south-facing homes with views of the sea are worth up to twice as much as properties with similar characteristics without any views.

In this sense, of the 600 properties in Barcelona that are worth more than €2 million, 301 are located in the neighbourhood of Sarrià-Sant Gervasi, i.e. 50.1% of the total. That district is followed by El Eixample (with 103 properties or 17.2% of the total), Les Corts (with 102 or 17%), Ciutat Vella (with 42 or 7%), Sant Martí (with 14 or 2.3%), Sants-Montjüic (with 9 or 1.5%) and Horta Guinardó (with 2 or 0.5%). None of the properties in Nos Barris and Sant Andreu are worth more than €2 million, given the low price per square metre of homes in those neighbourhoods, and the limited supply and demand for luxury properties there.

“Our buyers want to make their idealistic visions of Barcelona a reality. For them, the city is all about beauty, art, sun and sea. They come here for those reasons and they want their homes to fulfil those criteria of exclusivity”, said Emmanuel Virgoulay, Partner at Barnes International, the master franchise network in Spain.

Besides good views, other important factors that influence a property’s appraisal value are: its location, its size, its condition and its layout (whether or not it needs to be renovated), the monthly maintenance charge and the circumstances in the real estate market at the specific time when the sale is completed.

The apartments that cost more than €2 million range between 150 m2 and 350 m2 in terms of size, whilst the houses in the same price bracket range between 400 m2 and 1,000 m2 in terms of constructed surface area, plus any land. These types of properties tend to have large lounge-dining areas, 4 or 5 bedrooms, three bathrooms, lifts, high ceilings, large terraces, good sound proofing, a lot of light, a concierge/porter service and parking spaces. They also have special security systems and some offer a 24-hour security service.

Original story: Inmodiario

Translation: Carmel Drake