Housing Bubble in Barcelona? High prices and few offer slowdown Sales

Are we facing a new hiusing bubble in Barcelona?

The high prices and the low supply cause the slowdown in sales and the flight of buyers to dormitory cities like Sant Cugat del Vallès.

The reality of the real estate market in Catalonia during 2017:

What happened during the last year in the Catalan real estate market?

According to the data analyzed, obtained from the College of Registrers of Spain (updated until December of 2.017), the number of sales transactions in Catalonia rose on average by 11.2%, a percentage lower than that of Spain, where it increased 19.8%.
In the present study we analyze the evolution of the real price and the number of purchase and sale in the Catalan capitals and the main cities of Catalonia.
If we analyze exclusively data for the third quarter of 2017 we can see that in the city of Barcelona the number of sales has fallen substantially. The same goes for the whole of Spain where the number of sales and sales felt by 6.1%.

Analysis of the capitals: Barcelona, Tarragona, Lleida and Girona:
With regard to the rest of the Catalan capitals, sales have increased, but at a lower rate than in previous quarters.
What may be due to this decrease in the number of purchase sales?

The slowdown was already detected during the third quarter of 2017 due mainly to the increase in sales prices in the last six months. In cities such as Barcelona during the year 2,017 the real prices of sale have increased by 15.7% and in Lleida 10%.
The average price of the square meter in Catalonia is slightly higher than that of the Spanish average.
Barcelona doubles this average price, Girona equals it while Tarragona and Lleida are well below the Spanish average.

Escape from buyers to dormitory cities:

The average price of homes in Sant Cugat del Vallès is € 3,295 sqm, 2 14% lower than that of the Catalan capital. Despite this small difference, sales in Sant Cugat increased by 2,017 by 84% compared to the decrease of -2.5% in the City Comptal.

This is mainly due to the fact that the large offer of new construction homes in Sant Cugat; For the same price as that of a flat to reform in the center of Barcelona, you can buy a new apartment with a swimming pool, garden and parking space in Sant Cugat that goes to be in Barcelona like Aravaca or Mahadahonda in Madrid. Barcelona has little chance of making new building developments due to land scarcity.

In Badalona and L’Hospitalet the annual sales increases were 24% and 19% respectively, but these stocks are not so attractive due to the low supply of New Homes. It is worthwhile sacrificing the population change if the acquisition of the home represents a change in the quality of life SUBSTANCE for the whole family.

What happened to the rest of important Catalan populations? Sabadell, Terrassa, Granollers, Manresa Mataró and Reus

Here we can really appreciate a direct correlation between the price increase and that of purchase and sale; that is, at lower price increase, higher growth. This is the case of Manresa, with an annual price increase of 2% and sales of 27.1%, Sabadell 6.4% and 14.1%. In contrast, Terrassa suffered a price increase of 10.6% and increased purchasing operations of only 3.4%.

For the populations like Mataró or Reus, with little price increase and little increase in sales, the same think happens in Barcelona. Nearby towns such as Llavaneres or Caldes d’Estrac, with new construction housing and higher quality of life, cause the buyers to flee to these towns.

Monika Rüsch

www.monikarusch.com     Ph: +34 93 204 55 20