A quick glance at some basic data suggests that Barcelona’s property market is on the road to recovery.
This is hardly an exhaustive study, but the fact that asking prices and sales are rising in the Catalan capital is more evidence of an improving housing market in some parts of Spain.
It looks like property asking prices in Barcelona have finally bottomed out after six years of declines. This chart from Idealista* illustrates how Barcelona property prices have fallen 33 percent from the peak in the first quarter of 2007.
The next chart shows how they have risen four percent in the last year.
Will vendor expectations of higher prices be frustrated again, as they were when signs of a market floor in 2010 turned out to be a mirage, followed by another steep lurch down?
Unlikely, given that demand and sales are now rising strongly, by 7 per cent in the year to June, as illustrated by this chart.
With demand growing, and asking prices edging up, it’s difficult to avoid the conclusion that Barcelona’s property market has turned the corner.
Note that Barcelona asking prices bottomed out below 3,000 Euro/m2, implying a land repercussion value of around 1,500 Euro/m2 or less, in a city with an acute shortage of building land.
Barcelona also looks cheap compared to other European cities, bearing in mind Barcelona’s reputation as one of Europe’s most attractive cities. Using the Prime International Residential Index from Knight Frank’s 2014 Wealth Report, Barcelona ranks around Cape Town for city centre property prices.
*Idealista is one of the biggest property portals in Spain.