Barcelona new-home building collapse continues, but situation should improve with new Mayor

The Catalan College of Architects (COAC) has released figures for the first half of 2023 confirming the dramatic collapse in new-home building in Barcelona.

Planning applications signed by architects for new-home building and renovation projects slumped by 69% to just 240 units in the first half of 2023 (for a city of 1.6 million people), reveals a new report from the COAC. Compared to the same period in 2021, the decline was 79%.

In the metropolitan area around the city, residential planning applications increased by 6%, so the collapse has only taken place in the city itself, as you can see from the two charts below. Why is that?

The Catalan architects’ association, which has to get on with the authorities, and represents architects from across the political spectrum, uses diplomatic language to explain the cause. “On the one hand the decline might be provoked by certain changes in the planning regulations made by the administration, which has encouraged investment to move out of the capital,” says the COAC. “On the other hand there is the current economic situation.”

In other words, the policies of Barcelona City Hall under the left wing Mayoress Ada Colau and her Barcelona en Comù party have driven investment out of the city and led to a collapse in the supply of new homes, whilst the economic situation might not be helping either.

New Mayor, new outlook for Barcelona

Colau has just been voted out in local elections, though her party still has significant influence in the City Council. Jaume Collboni, the new socialist Mayor of Barcelona, is more business friendly, and thinks that Colau’s flagship policy of imposing a 30% social housing quota on all new projects above a certain size “is not getting the results that were expected in principle,” according to the local press. Colau said her policy would lead to 400 affordable new-homes every year, in reality it led to almost no new-homes for anyone, affordable or not. It’s hard to see how that benefits anyone.

Collboni has said he will review the social housing quota in the autumn. As the numbers clearly show the policy has been a disaster (as was predicted), you have to assume he will change it. With the Colau headwind out the way, the outlook for new home building in Barcelona looks more promising, but it will take time, maybe even years, to bring new projects online. In the meantime, the dwindling stock of new homes on the market will get more valuable.