Property in Barcelona - After the Referendum
06 November 2017
It is now just over a month since the subject of Catalan Independence made global headlines following the illegal referendum on the 1st of October. The subsequent confrontations, and the uncertainty associated with status of Catalonia, cast a shadow over the Barcelona property market.
According to Bloomberg from the 2nd October, Spanish equities were decreasing, sovereign yields were increasing, and the euro weakened against the dollar as investors worried that the push for secession in Catalonia could lead to an uncertain future for Spain.
These immediate threats appear to have waned however, with yields and Spanish stocks strengthening very soon after.
Barcelona is a huge part of the Spanish economy and contributes perhaps more than it receives from Madrid, which no doubt has contributed to the current debate. The Barcelona property market reflects this status with huge demand for residential property. This contributed to the unrest witnessed in August against the use of homes for tourism. Many in Barcelona feel that housing stock is inadequate and poorly distributed.
As with any supply side issue in a housing market, the solution is to either reduce demand or to create more supply. The demand side is being looked at via the licencing laws, for example it is illegal to offer your property for holiday lets via sites such as Air BnB in Barcelona, without a licence. This is intended to reduce the level of residential stock entering the tourism market. The supply side is being met by new developments, such as our project at Diagonal Port.
With normality returning to Barcelona, the property market appears well place to continue to grow.
Mohammad Butt, New Development Sales Consultant for Spanish developers Lucas Fox states, “although we have seen a turbulent few weeks since the illegal referendum vote for independence, we now are back on track with both re-sale and new development property transactions since Madrid has taken control of the region. As the date for the elections has been scheduled for December we expect a positive outcome and for both investors and lifestyle buyers to continue to look at Catalonia as a sound place to purchase property.”
Select Resorts Group’s International Director, Georgina Reilly, echoes the thoughts shared by the industry professionals and noted, “The vote on independence currently looks somewhat premature. I suspect that pressure will be applied on all parties and perhaps the end result will be greater autonomy for Catalonia within Spain. Barcelona, and Catalonia in general, is an economic powerhouse, contributing 21% of Spanish tax revenues. Barcelona has its own housing shortfall with a steep rise in tourist numbers having led to a shortage of rental properties for long terms tenants, thus, driving demand for property. Although there may be short term turbulence, the overall dynamics of the Barcelona property market make it an attractive proposition for investors.”
Demand is certainly high at Diagonal Port, where we have received a strong interest in the luxury residences. The development comprises of two beautifully-designed towers, one of which has almost sold out all of its apartments. If you are interested in property in Barcelona, please contact us and we would be pleased to send you details of available property and arrange your viewing trip.