All the signs point to good years ahead for the Spanish property market, making this is a good time to invest, especially in Barcelona, argues Gonzalo Bernardos , a professor of economics at the University of Barcelona, and one of Spain’s leading real estate experts.
Prof. Bernardos was speaking last night (pictured) at an afterwork meet for people interested in real estate organised by Raf Jacobs and his team of property buying agents at Inspire Boutique Apartments, a company that specialises in helping people buy property in Catalonia. I went along to hear Bernardos speak, as I’ve seen him quoted so often in the Spanish media.
Bernardos pointed out that the Spanish economy is growing nicely, which is good for housing demand, and explained how the property market only gets into trouble when interest rates start to bite, or when there is a serious problem of over-supply, neither of which looks likely in the next few years. So there is little risk of a market downturn anytime soon, according to Bernardos.
He gave his audience an insight into local buyers and sellers. Locals are keen to buy when prices are rising but don’t see the opportunity when prices fall, and vendors tend to ask way too much. He said that one large local estate agency has an average discount of 35% between asking prices and the final sale price.
When asked if the current slump in car sales in Spain is any indicator of consumer confidence with implications for home sales he explained that car sales are down because Government ministers have made careless remarks about the future of diesel, which has made many Spaniards delay their car purchase to see what happens.
Barcelona, Palma de Mallorca, and Madrid
Bernardos used these three cities to illustrate that, although local market conditions are important, foreign demand is now a key driver of demand and prices in all of them.
Palma is now the des res of many Europeans, whilst Madrid is a hot investment destination for Latin Americans. Foreign demand has changed the market in these cities dramatically in the last decade.
Barcelona was the hottest destination of all until the Catalan independence drive exploded in 2017 and turned off a significant portion of foreign investors. But as Bernardos points out, his hometown Barcelona is still one of the most attractive cities in the world, and the current political conflict that has reduced foreign demand and brought down prices is an opportunity to buy at a discount before the perceived political risk recedes.
He warned the crowd to be very careful who they deal with when buying or selling property in Spain as the sector is not renowned for its professionalism. He told us a story or two about clueless estate agents.
I had to leave before he got round to his specific investment recommendations.