The real estate market in 2019
In mid-May we published the 2019 Market Report where we explain which were the trends last year.
In general lines, the 1st semester had a rate of sales similar to 2018 and a practically flat evolution of prices. In the case of the rental market, we live with constant legislative changes, a total of 6. Because of this, no offer was generated due to insecurity and in some areas, prices even increased.
In the 2nd semester, the economic and political instabilities affected the sales that suffered for a couple of months. And in the rental market there was more legal stability until the end of December.
It is clear that the market is price sensitive, whether for rent or for sale, and when it is extremely high and this threshold is exceeded the operations stop.
Rent in 2019
Analyzing the rental market in 2019, we closed the year with more contracts than the previous year, exactly 10% more, because new construction projects aimed at the rental market ended. Despite these projects, the offer on the rental market is lower than the demand and this causes remain high prices, reaching an average of 1,200€ per month.
This high demand also meant that 63% of the apartments that went to the market took less than 2 months to rent, making only 9% of the cases spend more than 3 months. Much of this 9% was because owners tried to rent at 10% above market price and it cause them to take longer to find a renter. Therefore, it is demonstrated that in these cases trying to rent above the price penalizes the profitability of the house because it is empty and without income more time.
43% of the renters took a 3-bedroom flat, even though they were more who wanted 3 bedrooms, but due to the high price they ended up with 2-bedroom flat. The profile of the renters were young people, a 41% is younger than 40 years and already a 39% goes from 40 to 50. With this information from last year, we have seen that as the client’s age increases, the rental option decreases.
Sale in 2019
If we focus on the sales, in 2019, there was a 12% drop compared to 2018, especially in the months of October and November due to economic uncertainty and political troubles, causing a price drop for the first time in recent 4 years. A 54% of the second-hand flats sold were priced between 300.000€ and 450.00€, increasing compared to the previous year, which were 24%.
The case of new construction is always linked to promotions that come onto the market, and in recent years the offer has been very stable, especially in Sant Just, L’Hospitalet i Sant Cugat. Prices are related to the purchasing power of the buyers and there is not much option for promoters to raise prices. Sales were high maintaining rates of 7 properties per month, in the case of Sant Just Desvern reaching almost 10 flats per month, despite the drop in sales in the months of October and November it was recovered in December and remain at early 2020.
In high standing households was different, it represents a small number of operations, but significant due to the high price, being a consistent market. In 2019, the trend of the previous year continued, selling plots to build new custom-built single-family houses, being Sant Cugat the town where it happened the most.
In 2019 we keep betting on sustainable homes, encouraging owners to improve and update their properties and buildings in terms of sustainability and energy efficiency. But, as we have already commented, with the constant regulatory changes that took place in 2019, they discouraged the owners investments. Anyway, from Amat we amplify the GreenDEX project expanding the index that measures the amount of green, that we have been using in Barcelona since 2018, to Esplugues and Sant Just; our goal is that it reaches all the locations where we have real estate.
Facing 2020 looked like it was going to be a continuous year despite the uncertainties caused by the trade war between the United States and China, but with the eruption of the coronavirus and the crisis that it has caused it has sunk the market into a deeper hole than we expected and making it impossible to foresee its effects. In any case, we try to approach the future with optimism and with the opinions of the experts, as you can see in the video-interview series that we are publishing named ‘Despres del COVID-19’.