As every year we collect data from the real estate market to better understand their behavior. Following up we show you a summary of how it behaved the first semester of 2017 with regard to the sales market in Barcelona and its surroundings.
In general, the sales market is still very active, especially in brand new Construction, but we have to be cautious, especially with prices and valuations, since the price limits are very clear and it is advisable to move away from possible scenarios based only in expectations of price growth and not in the real economy.
From the offer point of view there are two different behaviors. If we talk about brand new hosuing we can say that this is normalizing throughout the metropolitan area. You can already find many projects both in the city and in the first crown of Barcelona. If we speak from the point of view of the Second Hand, there is little offer and is fragmented in many real estate agencies and in many cases overvalued, especially in the city of Barcelona.
Overall, we had an increase in sales of 47% compared to the same period of 2016, which has meant a 65% increase in volume. If we analyze what has been Second Hand and Brand New Housing, the increase compared to the sales of the same period of the previous year has been of 16% in Second Hnad and of 61% in the new housing.
SECOND HAND PRICES EVOLUTION
This analysis is difficult to do in detail since the characteristics of the properties sold vary greatly from one period to another and its price is very conditioned to these characteristics, especially to its state and location.
· Barcelona: As can be seen, the trend is upwards with an average annual growth of 2% in the last four and a half years.
· Sant Cugat del Vallès: Sant Cugat is a unique case since the crisis began when there were exceptional housing conditions in the market, this made the price drop very deep and very prolonged over time. As we have repeated in several reports, we have recorded a 70% fall in price, even below the target price that a city should have with the kind of Sant Cugat services. Today we can consider that the approximate value has already been recovered before the fall, since in four and a half years we have recovered 67% in price, approximately 15% per year.
· Sant Just Desvern: It is a very mature market and at the same time smaller than other areas where we work in. Therefore, fluctuations tend to be more moderate. The annual increase of the last four and a half years has been 2%.
BRAND NEW HOUSING
This market is still very active. We have already mentioned that we have had a 61% increase in the number of new construction sales compared to the same period of 2016. The main characteristics of this market are:
- Large projects outside the city and smaller projects in the city of Barcelona.
- New zones compared to a year ago, not only in the first crown of Barcelona, but also in more distant cities like Mataró, Sabadell, etc.
- In certain areas of the first crown there is a lot of competition from different promoters at the same time.
- A national buyer still predominates, but in some projects foreign buyers are already betting.
- Very high rate of sale, between 8 and 10 floors per month.
- The average age of buyers is 43 years.
- A significant number of buyers come from the city of Barcelona, especially in the promotion of Sant Just Desvern.
- Price travel during the marketing of between 10% and 30% upwards depending on each project.
- 74% of buyers intend to finance the purchase.
Looking to the future, the key is knowing how to understand the potential economic capacity of potential buyers
Looking to the future, the key is to understand how far the economic capacity of potential buyers reaches, since if the market is not really linked to the real economy, in a short time it can be broken or stopped again. And for this to be accomplished there is a determining fact, which is the price of the land. A key factor to contain the price of land is that there is a correct urban planning and, from this planning and the new generation of land, there will be some containment of its price and, consequently, the final price of real estate.
Between the end of 2017 and 2018, significant projects are expected to be marketed in Barcelona and in the surrounding area. In the city of Barcelona will begin the commercialization of some reference projects that we hope will mean a step forward in the residential conception of the city. We believe Hospitalet de Llobregat will be one of the most active locations in the coming months as many interesting projects will be on the market. And Badalona, Sant Cugat del Vallès and Sant Just Desvern will continue to maintain a high activity with new projects that will be incorporated as other commercializations are finalized.