As Spain is clawing back its economic buoyancy, it is starting to attract the attention of overseas investors and property buyers again. One city seems to be on everyone’s lips at the moment…Barcelona. Holiday home buyers wanting all the coast has to offer, along with year-round living, with the choice of traditional or modern living.
Spanish house prices are still down in most places around the country, according to the latest quarterly house price index, yet house prices rose for the second quarter in a row in the city of Barcelona, up 1.7% in value.
Barcelona Property Prices
The cities lead the way on the price surge and Barcelona now stands as a more expensive city than Madrid, when considering price per square meter, at €2,286, up 1.3% month on month (April) and marginally up on the year. Whilst Madrid stands at €2,214 per sqm, but yet is still down year on year and only marginally up on a monthly basis. Why is this when Madrid is the capital city? One could argue it partially reflects the divided property market in Spain, one which has more international property appeal and where foreign buyers are helping drive the market and the other, albeit the capital city, reflecting more of a domestic property market, where domestic buyers may still be grappling with overall affordability. Average yields are comparable at around 5% (Q1 2015) but certain districts can deliver more.*
Barcelona living just got more attractive
The new high-speed rail link connecting up London-Paris-Barcelona are adding to its allure for the international buyer.
Whilst there has been a long-standing rail link, the change is that it is now more joined up. In the past a Eurostar passenger from London to Paris, picking up the onward TGV would have had to disembark at the station at Figueres-Vilafant in Catalonia and change to a Spanish train. Until now the choice of a wider gauge track in Spain had created a barrier to a smooth uninterrupted journey on French trains, which use a standard gauge. The Figueres link is the final piece of the jigsaw – piecing together Eurostar, French TGV, Spanish AVE, new tunnels, stations, sections of high-speed line – that have honed the journey time down to about 10 hours, London to Barcelona.
The route to Barcelona is now a blend of the modern and the richly historic, passing through new TGV stations and classics of early railway architecture, with the historic eating and sleeping facilities associated with such monuments.
So buying an apartment in Barcelona for personal usage is looking up, there is also the potential for rental income.
Barcelona buy-to-let best?
While the long term rental market looks forward to a return to growth, there is some concern for the private holiday rental market. You may have heard about the hotel lobbying to ensure there is more regulation in the holiday let market, so that its growth is slowed down. Catalonia was one of the first to introduce a new letting licence system but recently the capital city’s council (Barcelona) suspended the granting of holiday rental licences altogether. Maybe they feel that the existing 10,000 tourist rental licences, throughout the city are sufficient. There won’t be any more until the new Special Urban Plan is passed, and it remains uncertain whether more licences will be forthcoming after that.
But let’s not forget, if you are looking to rent to friends and family on a short term basis then that shouldn’t cause a problem. Nor should it affect renting out for several months’ at a time, or if you are letting long term.
Real estate in Spain has reached a low since the crisis. Now with buy prices historically low, rental prices on the up, yields are robust and represent a worthy investment.
There is an abundance of low-cost property on sale and growing interest in it. Now with Spanish property representing some of the best value in Europe, use a pragmatic agent to help find the best value apartment or property for you in one of its prime cities.
Sources: Spanish Government statistics, TINSA, *Idealista
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Tags: Barcelona, Buy to let, Coastal Property, holiday home, investment property, overseas property agent, Spain