They say don’t mix business with pleasure, not an easy mantra when considering dabbling in the Catalan property market. We defy anyone to invest in this city and then not feel an overwhelming desire to up sticks and move here permanently. Barcelona has the food, the art, the nightlife, the football, the sea, the hills and the people. It is a city that caters to everyone’s needs, hence the huge amounts of expats who call it home and the waves of tourists who arrive armed with a selfie-stick and leave dressed head to toe in Barça memorabilia. The allure of this city is what makes it the richest in Spain and also the best option for the property savvy looking to make some money.
For the investors out there with deep pockets but short little arms, don’t worry Barcelona is a safe bet! Property prices are now in recovery following 6 years of decline after the crash and at the same time residential property transactions have been gradually on the up over the last few years; both encouraging trends that show the tide has turned and confidence in the market is back!(i)
Investment Invaders from the North
Foreign investment in the city has been high since before 2010 with around 17% of all property transactions in 2014 coming from abroad. For many years a hefty portion of foreign investors have been form the UK with a strong pound to the euro. More recently the numbers from France, Germany and Scandinavia have been increasing and especially here at Casamona we welcome tremendous amounts of Scandinavians year after year (roughly 80% for sales). However after the Golden Visa came into act in 2013 – a scheme which grants visas to those spending over €500,000 on property – more money has been coming from Russia and China also.(ii)
Where Should I Buy?
Investing centrally in areas such as Eixample and Ciutat Vella is a low risk option as prices here bottomed a couple of years ago and have been on a steady course back up. These areas are desirable, popular and constantly attracting tourists and short-term renters. Those prepared to invest over a longer period and with slightly higher risk should look towards El Raval and Poble Sec, two less desirables areas of the Ciutat Vella where prices have always remained lower. (iii) However a changing demographic and expensive renovation projects make these areas excellent investment opportunities. Further up the Barcelona coast you will come across Poblenou which attracts many foreign buyers for luxurious beach front apartments especially in the Diagonal Mar i el Front Maritim del Poblenou neighbourhood where prices have been sky rocketing.
What Are My Options?
With the ever-escalating Barça tourism, short-term rental investment has been a growing trend in the property market here. However the backlash from these growing numbers has resulted in restrictions on this activity through a system of licenses. It can prove a difficult task to obtain these permits from the local government due to the high demand. If you plan to buy for this purpose we suggest looking for a property that already has a permit or alternatively buy the permit from a local. You might also look to buy for long term rents, offering lower yields but more secure contracts, lower maintenance costs and happier neighbours. Finally, you may decide to buy somewhere for yourself to live. If this is the case there is no doubt you will enjoy your Mediterranean life here and equally enjoy the capital gains reward if and when you decide to sell. However you decide to invest, you won’t be sorry to put some of your money into this exciting and lively city.
Written by: Simon King