Just as the property market recovery was consolidating after years of crisis, trouble and uncertainty in Catalonia has put the recovery in jeopardy in the region.
This is an abridged translation of an article originally published at the Spanish daily El Mundo in the days before the Catalan regional government declared itself a Republic independent of Spain.
When the property sector was starting to consolidate its recovery after years of in the dark it has come up against independence troubles in Catalunya, and the effects of the subsequent political uncertainty. Investors, particularly foreign ones, don’t understand what’s happening, and prefer caution in the face of doubt. This means several transactions about to go ahead have been put on hold, and a more cautious approach to investment decisions.
The latest moves by the Catalan government, the Generalitat, and the feeling that Spain’s government isn’t quite in control of the situation only add to the legal and economic insecurity for investors waiting in the wings. In several cases, parties involved in sales and transactions have requested more time to see how the conflict goes before making a definitive decision on whether to invest in Catalunya. “Rumours are flying around and nothing’s certain so lots of people would rather wait and see,” said sources from the sector.
The Association of Property Consultants (ACI in Spanish), which includes Spain’s largest property consultancy firms, recognises that the latest events “have badly affected normal investment activity and the development of the market” and has called for “compliance with the law and respect for the Spanish Constitution”. However, the association isn’t prepared to put a figure on the possible impact of the independence tensions.
“Everything was fine until September,” say other property experts. But the approval of the referendum law and, above all, the disputed vote on the 1st October, were a turning point, and now everything is up in the air. This isn’t because investors are looking outside Spain at other countries, but “because they could redirect their money to other Spanish cities instead of Barcelona,” the sources explain.
Yet again, Barcelona would be one of the most affected in economic terms. According to data from BNP Paribas Real Estate, the procurement of area for logistics in the Catalan capital in Q3 reached 77,100 square metres, 31% less than the previous quarter and almost 50% below Q3 last year. The company underlines the fact that “despite the fall in procurement in the last quarter, which is due to seasonal factors, and the lack of large transactions like those seen last year, trends still show clear improvement since 2014.