The upmarket real estate agency Barnes International, with offices in Spain, forecasts that house prices will fall as much as 30% in coming months as a result of the coronavirus pandemic.
First established in France, Barnes has Spanish offices in Marbella, Madrid, and Barcelona, where it started it’s expansion in Spain. In Barcelona, deals done in September were closed with discounts of 10% to 15%, report Barnes, based on their own sales. Prices at the high end do not go above 7,000 €/sqm in current market conditions, they say.
“Price declines are inevitable in the next few months, given the context in which we are living,” says Emmanuel Virgoulay, from the Barnes office in Barcelona, quoted in the Spanish press. “In fact the only way in which Barcelona in particular, and Spain in general, will become attractive again [to foreign investors] from the perspective of housing is if prices decline, adjusting to the current reality of the market, and the financial capacity of demand.
Barnes are arguing that prices in upmarket segments of locations where foreigners make up a significant share of the market, for example Barcelona, Marbella, and the Balearics, will have to adjust to reality without foreign investors, at least until the Covid-19 pandemic is behind us. That will have a depressing influence on high-end prices in those areas.
Virgoulay points out that “primary home buyers will not pay above market rates, whilst investors are waiting for bargains that have not yet emerged.”