Keep calm and carry on. That’s the gist of advice from industry insiders asked their opinion on the Barcelona housing market as the Catalan independence drive turns violent.
I’m not so sanguine. Last week I argued that Catalonia’s independence drive is creating a stiff headwind for the local property market, especially in Barcelona. But most industry insiders and experts consulted by the Spanish daily El Pais say that Barcelona’s housing market will shrug off the conflict, and continue to power ahead.
Estate agents playing down bad news? Not exactly unheard of. That said it’s interesting to hear what those closest to the market have to say, even if you have to read between the lines.
So here is what they have to say about the impact of the Catalan independence drive on the housing market, especially in Barcelona, as reported by Sandra Lopez, a journalist with El Pais, who often writes about the Spanish housing market.
First of all, the negative interpretation from an academic. “The images of riots in recent days, and the attempt to take over the airport, will have a substantial impact,” says José García Montalvo, an economics professor at Barcelona’s Pompeu Fabra University. “Both international investors and small-scale local investors will be affected.”
García Montalvo claims that “the fall in sales in the Ciutat Vella [Old Town including the Gothic Quarter] and the Eixample, which are the real estate lungs of the city, have been very significant.” He forecasts “price weakness in future,” pointing out that the riots and violence are taking place against a backdrop of “negative macroeconomic and sector expectations in the middle of a change in the cycle, which can amplify the sense of risk.” He warns that even if the violence organised by the so-called ‘Committees for the Defence of the Republic’ subsides, the damage to confidence has been done, and that “this time it will have a permanent effect,” in comparison to the temporary decline in buyer interest after the illegal referendum and unilateral declaration of independence in 2017.
Enrique Losantos, Executive Director of international real estate consultants JLL in Spain, has a very different take on the situation. “Despite the political instability, the real estate market has never been so sweet. There has never been so much money around, including in the real estate sector. The funds are flush with cash, and Barcelona is one of the most attractive cities in the world for investment and living in, so there’s no reason to expect investment to decline,” he argues.
Anna Gener, President and Executive Director of Savills Aguirre Newman in Barcelona, is also sanguine about the recent trouble in Barcelona. Fund managers are unfazed nowadays by scenes of conflict, she argues. “They see it every time there is a summit on the environment, with the Gilets Jaune in Paris, in Hong Kong, or due to Brexit in the UK,” she says, adding that not a single client has been in touch with concerns about the recent trouble in Barcelona.
Stijn Teeuwen, a founding director of Barcelona-based estate agents Lucas Fox, says that “The market in Barcelona is sufficiently solid and attractive to continue getting the attention of investors in the medium and long term.”
Speaking for international real estate consultants CBRE in Spain, Exec. Director Mikel Marco-Gardoqui says that “No investor with an opportunity in hand is considering walking away. Barcelona is going like a rocket.”
On the other hand, some funds “are not prepared to invest in Barcelona, especially not in blocks of flats for rent, thanks to the belligerence of the independence movement towards developers and funds,” argues Mikel Echevarren, Exec. Director of Colliers in Spain. Madrid-based Echevarren says funds are still interested in his hometown. “A decade ago fund managers all wanted to go and live in Barcelona, but not any more,” he adds.
“Madrid is winning the real estate race against Barcelona thanks to inertia and the lack of institutional and public order problems,” explains García Montalvo, as the article wraps up.
Of course, the situation in Barcelona is not just a question of the independence drive. Also important are factors such as local demand, municipal policies on housing, and housing affordability. On this front the latest Barcelona property market report from Amat Immobiliaris, the longest-standing estate agency in Barcelona, provides plenty of data and reasons to be sensible about the long term outlook of the market. You can read the latest report on the market in the first half of 2019 here: