The city of Barcelona has a total surface of 100 square kilometres, situated between the Mediterranean sea and the Collserola hills on one side, and the Llobregat river and the Besos river on the other side. This delimitation creates a relatively small size territory which accommodates around 1.6 million people, which implies a high density rate of population, especially if we consider the large number of temporal visitors that arrive throughout the year to Barcelona.

The province of Barcelona forms the centre of an extensive metropolitan region of more than 217 municipalities in which 4.3 million people live. It is the economic, cultural and administrative capital of Catalonia, situated in the northeast of Spain, on the shores of the Mediterranean Sea.

The real estate market in BarcelonaThe character of the Barcelona real estate market is determined to a great extent by its great cultural and economical diversity, that creates a unique mixture between residential and commercial properties. In most of the city neighborhoods and districts people live, work and shop at once. There is very little separation between the residential dimension and the commercial dimension and there is easy access within the same district to most of the important services: medical, cultural, leisure, sport etc. The great diversity of the city makes it extremely dynamic. The high density of the city as well as its vitality, mixture of uses, balanced climate and Mediterranean spirit convert the streets and the squares of Barcelona into meeting points which facilitate social cohesion.

The open and receptive character of the city's habitants attracts many foreigners and many of them decide to establish their permanent residency in Barcelona, enjoying its quality of life and its cosmopolitan atmosphere. As a result, the population of Barcelona is becoming more and more diverse, with more than 150 different nationalities represented.

In terms of its real estate evolution, in recent decades Barcelona experienced a great transformation, especially after the Olympic games in 1992. The spectacular organization of this emblematic event brought worldwide fame and recognition to Barcelona and for the first time brought the unique quality of the city and its magical character to the attention of millions.

The smart and extremely efficient management of Barcelona’s City Hall and the “Generalitat de Cataluña” (the local authorities) have contributed greatly to the city’s worldwide fame and to the positioning of Barcelona as one of Europe’s major metropolis. By simplifying the entrance to the local market for international investors and multinational companies, the city has experienced huge growth, which continues until today.

Evolution of the demography of Barcelona: years 1991 – 2004

Nationality by countries: 1991 1996 2001 2003 2004
TOTAL 1.643.542 1.508.805 1.503.884 1.582.738 1.578.546
Espanya 1.620.140 1.479.746 1.408.528 1.415.515 1.390.173
Alemanya 1.914 1.604 2.381 3.439 3.799
França 1.994 2.011 3.587 5.342 5.963
Itàlia 1.803 1.697 4.139 7.363 9.107
Regne Unit 1.027 944 1.864 2.784 3.140
Resta UE 1.159 1.529 3.116 4.847 -
Resta Europa 1.302 894 5.689 11.402 19.232
Marroc 1.727 3.332 7.426 11.955 12.432
Resta Àfrica 601 1.069 3.258 4.945 5.138
Estats Units d'Amèrica 708 581 1.130 1.861 2.142
Argentina 2.170 1.548 3.963 9.756 10.803
Perú 726 2.911 7.593 11.190 12.447
Chile 854 704 1.965 3.522 4.161
Resta Amèrica 3.632 5.144 35.303 62.018 71.638
Filipines 1.253 2.040 3.479 5.244 5.348
Resta Àsia i Oceania 2.459 3.035 10.455 21.555 23.023
Apàtrides 37 16 8 - -
No consta 36 - - - -

Department of Statistics / Barcelona city hall

This important immigration flow has significantly affected the growing real estate market in Barcelona until 2007 in a way that prices have been on the rise for almost a decade now. In the end of 2007 and the beginning of 2008 we have witnessed a change of tendency though and prices started to go down again as the international economy affected the Spanish property market as well.

Here are some official numbers about prices of second hand residential apartments in Barcelona, between 1999 and 2009. The prices are divided by the different areas of Barcelona and are cited in Euros per square meter.

As can be seen in the tables below, prices of properties in Barcelona have experienced a spectacular growth during the last decade. However, as from 2007 we see a clear slowdown and prices during 2008 and 2009 are dropping by an average of 10%, as can be seen clearly below.

The evolution of prices per square meter for residential properties for sale in Barcelona - Eixample district

DISTRICT YEAR TRIMESTER PRICE Euros / m2
Eixample 1999 Diciembre 2.224,00
Eixample 2000 Junio 2.404,00
Eixample 2000 Diciembre 2.536,00
Eixample 2001 Junio 2.705,00
Eixample 2001 Diciembre 2.885,00
Eixample 2002 Junio 3.035,00
Eixample 2002 Diciembre 2.930,00
Eixample 2003 Junio 3.168,00
Eixample 2003 Diciembre 4.001,00
Eixample 2004 Junio 4.014,00
Eixample 2004 Diciembre 4.259,00
Eixample 2005 Junio 4.269,00
Eixample 2005 Diciembre 4.427,00
Eixample 2006 Junio 4.705,00
Eixample 2006 Diciembre 4.930,00
Eixample 2007 Junio 5.368,00
Eixample 2007 Diciembre 5.384,00
Eixample 2008 Junio 5.397,00
Eixample 2008 Diciembre 5.300,00
Eixample 2009 Junio 5.281,00

Source: Sociedad de Tasación SL, Spain’s main evaluation agency ( http://web.st-tasacion.es/html/index.php).

The evolution of prices per square meter for residential properties for sale in Barcelona - Gracia district

DISTRICT YEAR TRIMESTER PRICE Euros / m2
Gracia 1999 Diciembre 1.803,00
Gracia 2000 Junio 1.923,00
Gracia 2000 Diciembre 2.086,00
Gracia 2001 Junio 2.164,00
Gracia 2001 Diciembre 2.404,00
Gracia 2002 Junio 2.554,00
Gracia 2002 Diciembre 2.517,00
Gracia 2003 Junio 3.004,00
Gracia 2003 Diciembre 3.135,00
Gracia 2004 Junio 3.503,00
Gracia 2004 Diciembre 3.662,00
Gracia 2005 Junio 3.810,00
Gracia 2005 Diciembre 3.845,00
Gracia 2006 Junio 4.504,00
Gracia 2006 Diciembre 4.364,00
Gracia 2007 Junio 4.520,00
Gracia 2007 Diciembre 4.444,00
Gracia 2008 Junio 4.463,00
Gracia 2008 Diciembre 3.992,00
Gracia 2009 Junio 4.033,00

Source: Sociedad de Tasación SL, Spain’s main evaluation agency ( http://web.st-tasacion.es/html/index.php).

The evolution of prices per square meter for residential properties for sale in Barcelona: Sarria - Sant Gervasi

DISTRICT YEAR TRIMESTER PRICE Euros / m2
Sarria - Sant Gervasi 1999 Diciembre 2.584,00
Sarria - Sant Gervasi 2000 Junio 3.005,00
Sarria - Sant Gervasi 2000 Diciembre 3.065,00
Sarria - Sant Gervasi 2001 Junio 3.245,00
Sarria - Sant Gervasi 2001 Diciembre 3.576,00
Sarria - Sant Gervasi 2002 Junio 3.666,00
Sarria - Sant Gervasi 2002 Diciembre 3.382,00
Sarria - Sant Gervasi 2003 Junio 3.798,00
Sarria - Sant Gervasi 2003 Diciembre 3.655,00
Sarria - Sant Gervasi 2004 Junio 4.505,00
Sarria - Sant Gervasi 2004 Diciembre 4.848,00
Sarria - Sant Gervasi 2005 Junio 4.980,00
Sarria - Sant Gervasi 2005 Diciembre 5.040,00
Sarria - Sant Gervasi 2006 Junio 5.587,00
Sarria - Sant Gervasi 2006 Diciembre 5.771,00
Sarria - Sant Gervasi 2007 Junio 6.772,00
Sarria - Sant Gervasi 2007 Diciembre 6.737,00
Sarria - Sant Gervasi 2008 Junio 7.160,00
Sarria - Sant Gervasi 2008 Diciembre 5.863,00
Sarria - Sant Gervasi 2009 Junio 6.729,00

Source: Sociedad de Tasación SL, Spain’s main evaluation agency ( http://web.st-tasacion.es/html/index.php).

The evolution of prices per square meter for residential properties for sale in Barcelona: Sants Montjuic

DISTRICT YEAR TRIMESTER PRICE Euros / m2
Sants - Montjuic 1999 Diciembre 1.563,00
Sants - Montjuic 2000 Junio 1.713,00
Sants - Montjuic 2000 Diciembre 1.833,00
Sants - Montjuic 2001 Junio 1.947,00
Sants - Montjuic 2001 Diciembre 2.164,00
Sants - Montjuic 2002 Junio 2.146,00
Sants - Montjuic 2002 Diciembre 2.171,00
Sants - Montjuic 2003 Junio 2.359,00
Sants - Montjuic 2003 Diciembre 2.813,00
Sants - Montjuic 2004 Junio 3.149,00
Sants - Montjuic 2004 Diciembre 3.301,00
Sants - Montjuic 2005 Junio 3.329,00
Sants - Montjuic 2005 Diciembre 3.437,00
Sants - Montjuic 2006 Junio 3.780,00
Sants - Montjuic 2006 Diciembre 4.066,00
Sants - Montjuic 2007 Junio 4.373,00
Sants - Montjuic 2007 Diciembre 4.416,00
Sants - Montjuic 2008 Junio 4.264,00
Sants - Montjuic 2008 Diciembre 3.678,00
Sants - Montjuic 2009 Junio 3.862,00

Source: Sociedad de Tasación SL, Spain’s main evaluation agency ( http://web.st-tasacion.es/html/index.php).

Real estate ROI (return over investment) in Barcelona residential and commercial market

The expected return over a real estate investment in Catalonia from rental income is quite similar to the rest of Spain and represents around 5% over the net value of the property. Investments in commercial properties, especially in prime locations, can generate higher returns, but those become more and more difficult to find (and they are also very expensive). However, in the last 15 years the average increase in value of residential and commercial properties was around 7% annually, and during the last 7 years has been over 15% annually. Our experience from the last ten years shows that after removing the speculation factor, a smart investment could generate a ROI of more than 7% annually, calculated over a minimum timeperiod of 5 years. We also believe that for commercial properties in the centre of the city the future prospects are very positive and even higher returns can be obtained, over a timeperiod of 7 years.

 

The rental market in Barcelona

The real estate rental market for residential and commercial properties in Barcelona is very strong and characterized by its large and steady demand. In residential properties the reason for that is mainly the fact that most locals prefer purchasing their residence over renting them. Based on general publications more than 90% of local residencies in Catalonia are full ownership residencies while the offer of apartments for rent is very limited. In fact in recent years Barcelona has become famous among European residents visiting the city for its rented accommodation facilities and sometimes the price of a single bedroom for rent in the city centre can reach up to 600 Euros per month.

Barcelona’s real-estate boom of the last decade has created another phenomenon which is the short term rentals market, directly related with the shortage of available accommodation for rent in the city. Many companies offer furnished apartments for a short-term stay as an alternative to traditional hotel accommodation. Hotels in the city centre have become very expensive and on many occasions they are completely booked out. Income from short-term rental apartments in Barcelona has been spectacularly gone up until 2008. Since 2009 it has become more moderate due to very strong competition in this sector. However, it is still a very attractive form of income for many investors, especially non-Spanish buyers investing in residential properties in Barcelona.

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