New rent-control restrictions in the Catalonian capital have made Barcelona a tougher sell for investors recently.

Barcelona – Capital of Catalonia and Community’s Largest City

On the coast of northeastern Spain, Barcelona is the capital and largest city of the autonomous community of Catalonia with approximately 1.6M people.  Barcelona, home to the architectural beauties of Antoni Gaudi and Luiis Domenech i Montaner and their designated UNESCO World Heritage Sites, is known for its rich cultural heritage, prestigious universities, world-class art museums and food, and scrumptious food.

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Barcelona is a major cultural, economic and financial center in southwestern Europe and the main biotech hub in Spain.

Market Overview

The Catalan government of Barcelona instituted 2020 rent-control laws in Barcelona due its housing shortage.  Then came COVID and the city’s usually flourishing pool of tourist buyers dried up.  The result?  Selling rental properties to investors, especially at a profit, became much tougher.  Potential buyers continued to worry about rent caps.

Today, Maria Larsson, CEO of Larsson Estate, said that the city is still “very attractive” to foreign buyers who see real estate as a longer-term investment. Spain’s Association of Land Registrars indicated that home sales in the larger province of Barcelona have begun bouncing back.

Prices and Sales Volume

Prices of existing properties, according to a report by Barcelona’s City Council, have dropped about -10% from pre-pandemic and pre-rent control times.  Idealista, an online property platform in Southern Europe, indicated that an average price for a home in Barcelona province during Q3 2021 was approximately $280/square foot, +47% higher than Spain’s national average.  Tine Mathiassen, founder and director of Casamona Real Estate, a Barcelona agency that caters to foreign buyers, said, “I can’t see (prices) go lower.”

Barcelona’s luxury market, on the other hand, has seen prices go up by an average of approximately +7 – +8% in the past 12 – 18 months citywide, according to Mohammed Butt, Barcelona office director of and international luxury agency, Lucas Fox.  Butt said, “We were surprised by how quickly the market bounced back.  We had a very, very strong 2021, not far off from our results in 2019, which was actually our record year in the company’s history.”

Who Are Buyers?

Mathiassen said that she is seeing a “slow, slow, slow movement now of Americans…” wanting to take advantage of Spain’s Golden Visa program with an investment of $565,000 in real estate.  Mathiassen is also seeing more Scandinavia buyers coming into Spain’s housing market as cash buyers.

Larsson indicated that most of her foreign buyers (approximately 15%) come from France, Italy and other European nations, with a smaller number from Russia and China.  In tourist-friendly areas such as Ciutat Vella “where literally you feel like you’re living in a movie…absolutely gorgeous), Eixample (metropolitan lifestyle). and the neighborhood of Poblenou on the Mediterranean coast with townhouses and converted industrial buildings,” properties are selling.

Butts with the Lucas Fox agency said that his agency sells to buyers from Northern Europe, the US, the United Arab Emirates and Saudi Arabia along with the return of British buyers who didn’t need a visa to live in Spain pre-Brexit.  Butts said, “That’s a whole new pool of buyers that didn’t need a golden visa four or five years ago, but now they do.”

Basics of Buying in Barcelona

There are no restrictions on foreigners buying property in Spain.  Buyers pay a 10% property transfer tax plus roughly 2% for legal and notary costs.  New-construction buyers pay an additional stamp duty of 1.5%.

Whether the buyer is Spanish or international, banks in Spain require a larger down payment for second residences, regardless of where in the world primary residences are locate.

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Thanks to The New York Times.









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