The main players in the property sector agree that it’s too early to judge the real impact of political instability in Catalonia on the market since 1 October when the illegal referendum was held. However, there are already signs that offer some idea of the collateral damage caused by the independence process on the Catalan property market.
Adapted translation of an article published in El Mundo
For example, the price hikes that have taken place all this year have slowed down. According to data from Fotocasa, property prices were 6.1% more expensive in October. In previous months, they had been registering double-digit rises (10.6% in September, 11.6% in August and 12% in July). According to head of the research at Fotocasa Beatriz Toribio, “we’re not talking about prices coming to a halt but they are slowing down”.
Not all Catalan provincial capitals have been affected in the same way by the slow down. For example, prices in Lerida, Gerona and Tarragona have grown by 5-6% this year, in line with the rest of Spain, and have now fallen by 1%. In contrast, Barcelona has gone from a 19% price hike in September to under 15% in October. “In this particular city, political instability may even have been a good thing to bring prices down,” said Toribio.
Barcelona rental market also affected by independence drive
A similar pattern has emerged in the rental sector where prices in Catalonia had increased by as much as 18% in some months – now they’re rising by 14% – and by up to 20% in Barcelona, where in October they only went up by 3%. “We were already noticing adjustment in the market because prices couldn’t get any higher, but the trend has started early as a result of the political tension,” said Toribio.
The market rental is also the most affected by the decision not to house the new headquarters of the European Medicines Agency (EMA) in Barcelona instead of London. Barcelona was the favourite to house the agency with an annual budget of €400 million and 900 employees, visited by 40,000 people a year and that feeds an ecosystem made up of 1,600 companies and 5,000 professionals in the pharmaceutical industry.
The possibility of an independent Catalonia leaving the EU was probably a decisive factor in the EU’s decision not to choose Barcelona. And this, in turn, “has avoided the possible increase in demand for rental housing in Barcelona, which would have pushed prices up even higher,” said Lázaro Cubero, head of the Analysis and Report department at Grupo Tecnocasa.