Barcelona Confidence Returns, Barcelona

Barcelona Confidence Returns
Properties for both families and entertaining in the quiet sophisticated district of Pedralbes. Here, 480 m2, with seven bedrooms for € 4,590,000 (Coldwell Banker)

The Catalan capital, with its sun, magnificent architecture and excellent transport networks, is famous for luxury real estate. The price boom is over and demand is starting up again.



It was a rather lacklustre year-end for Barcelona. In September, the regional elections saw a separatist majority take control of the Catalan parliament, although in terms of votes, the non-separatists won by a small margin. Two months

later, the financial ratings agency Fitch downgraded the region's debt by two levels due to the predicted tensions. Catalonia is rich, as is its capital Barcelona, but it is also one of Spain's most indebted regions and was not immune to the crisis.



A small palace in the heart of the city, a real modernistgem on the Passeig de Gràcia: 632 m2 floor space, 300 m2 terrace and four bedrooms for € 9 million (Coldwell Banker).


A two-speed market

The Barcelona property market is performing better, but it remains fragile and is stillnowhere near the 'Eden' that seemed likely during2005-2006. 'It is a two-speed market and we are not used to that, except in the seaside resorts, according to Jesús Gonzalez Mas, Director of Sotheby’s International Realty. We are witnessing a 'premium' segment with increasing prices and another more traditional segment that remains stable.' The days when the rich bourgeois parted with their property to cope with financial hardship seem to be over. There is even a shortage of top-quality properties, because in Spain, selling your property assets is a bit like falling into poverty... The fact  remains that 'very rich customers are no longer afraid to spend large amounts of money for the pleasure of living in Barcelona', noted François Carrière, President of Coldwell Banker Spain, with a certain satisfaction. One example is the most expensive rental deal in Barcelona, at€ 35,000/month, that the agency has just signed for
a member of the Saudi Arabian royal family. There was also a 'VIP' transaction with the singer Shakira and her partner, the Barça defenderGerard Piqué. The couple visited a home in the celebrity district of Pedralbes a while ago, but found it too expensive. However,Shakira has just bought a property for the 'bargain' price of € 5 million, 30% less than theprevious property. As in several large cities, particularly Paris, the drop in prices is boosting demand and therefore market activity.

The developer Emerige has chosen to set up in the Sant Gervasi-Galvany district, where it is offering a fully refurbished building at 307 Muntaner for € 6,300/m2 (on the left, the marble vestibule, on the right one of the terraces).

A cosmopolitan demand

But Spain has not completely recovered from the economic crisis. Unemployment, a sword of Damocles hanging over all European countries, is falling but remains high at around 20%, the second-highest rate in Europe and just ahead of Greece. 'We are aware that we are building on ashes' admitted Emmanuel Virgoulay, who created the first licences for Barnes in Spain. The group will open two branches in the first quarter, one in Barcelona and one in Madrid. When there is no crisis,  Barcelona has a dynamic market for luxury properties that  sparks professional interest. The big Catalan estate agents are well established, including Lucas Fox, a major name in Spain, Portugal and Andorra. Local agencies such as Lux Habitat and Chic Room Properties Barcelona, also have a strong reputation. The international networks are on the look-out for pieds-à terre and villas with sea views to attract clients from more northerly climates. They include Engel & Völkers, Coldwell Banker and the real estate branch
of Sotheby’s. Coldwell Banker estimates that one third of the clientele comes from France and, according to Barnes, 90 % of transactions over € 1 million are with foreigners. Demand from outside the European Union has grown exponentially since the creation of the Golden Visa, a document launched by the government to revive investment; it is granted with every property purchase of at least € 500,000 and offers owners a permanent residency permit. It also allows free movement within the Schengen
area. The first person to receive such a visa was a Chinese woman in 2014. The scheme appeals to buyers from the Gulf, as well as to Egyptians and South Americans.


Properties for both families and entertaining in the quiet sophisticated district of Pedralbes. Here, 480 m2, with seven bedrooms for € 4,590,000 (Coldwell Banker).


The return of the new

Barcelona is trapped by mountains, the sea and two rivers, with no possibility of escape. The city centre remains iconic, but the lack of reclaimed land means that new projects are few and far between. There are currently just five or six underway. National developers are cash-strapped and still do not have a presence in the market, although there are plenty of foreign groups, particularly French.Emerige and Spirit have begun to market their first projects. 'These are well-located properties costing around € 5,000/m2,’ according to François Carrière, ‘so those who love the Barcelona sun can buy a two-bedroom pied-à-terre for a realistic price of between € 250,000 and € 450,000.' The forerunner of these French developers was an estate agent working with
a local Barcelona firm of architects. The buildings only contain around ten flats, but this developer is already running his fifth programme... Will we see magnificent contemporary architecture in the near future, with projects managed by large international agencies? This is what Jesús Gonzalez believes. 'American and Indian  investment funds have just purchased large apartment buildings for € 80 to € 90 million. They plan to develop ultra-luxurious flats, no doubt using the services of large architectural firms. They will not be ready for at least two or three years.


Terraces are as rare as they are in demand, particularly in the centre.

The 'Places to be'

In the mid 19th century, Barcelona was surrounded by ramparts. Cerdà, a progressive urban planner, was given the job of designing a city extension to relieve the pressure on the old town. This district is now called Eixample, which means 'extension' and was designed according to a grid plan similar to that of some Latin American cities. The Barcelona bourgeoisie of the time loved modernity and decided to move there, commissioning architects such as Antoni Gaudí (1852- 1926) to design the most extravagant homes. Three of his major Modernist buildings, the Casa Battló, the Casa Lleó i Morera and the Casa Amatller, can be found on the Passeig de Gràcia.There are plenty of luxury properties available in this city centre 'golden square', with high ceilings,decorative features, great opulence and vintage ceramic floors. It is possible to find a small, 600 m2 luxury garden-level home with a 300 m2 terrace. Properties designed by Gaudí's disciples even appear on the market from time to time.
Unfortunately, the flats do not usually have balconies. 'L’ático', or top floor/penthouse, is a rare commodity worth almost twice as much as the lower floors. Older properties cost an average of between € 3,500 and € 4,000/m2. On the top floor,
prices start at € 6,000/m2 and rise to € 8,000/m2 on Gracià. Properties in Pedralbes are more family-oriented, have beautiful gardens and still have the wow factor, especially on the district's most prestigious street, Avenida Pearson. The minimum
surface area of the houses is 500 m2 on plots of 1,000 to 3,000 m2. Budgets run from € 5 to € 10-12 million. 'Second-hand' flats are more affordable, usually between € 4,500 and € 5,000/m2. A local developer plans to launch a programme at € 8,000/m2. The presence of the French lycée in the district is an additional selling point.

Sea view

The sea front is divided into two main districts. La Barceloneta, where fishermen used to live, is defined by its historic architecture, some of which dates back to the 18th century and the construction of the Parc de la Ciutadella. It is home to charming buildings dating from 1880-1900 and is a very lively district, with restaurants, tapas bars and much more. It began to change for the 1992 Olympic Games. Four kilometres of beaches were modernised and a marina was built just opposite the sea at a high cost.Diagonal Mar, the second sea-front district, is at the very end of Avenida Diagonal, the main artery that cuts through the Catalan capital from west to east. The architecture is more recent, dating from the 2000s. And Diagonal Mar, the largest
shopping centre in Catalonia, offers hours of shopping. The large modern complexes that constitute the district's façade are less attractive to European eyes, but the Russians adore their 'Miami' look.



In the heart of Eixample, this split-level flat with terrace and 160 m2 living space is worth € 1.4 million (Sotheby’s International Realty).

 Investing in Barcelona?

The election of Mayor Ada Colau on the back of the Indignados (Outraged) protest has just put an end to the popular short-term furnished rentals in the Catalan capital, which welcomes several million tourists a year. The famous tourism licences have now been frozen, but people are calling for an end to this curb, particularly operators who have incurred costs to set up projects. It is thought that the Mayor's position may soften and some districts will again be able to use this rental method. 'Generally speaking, the average reasonable rate of return of around 5 % has decreased slightly,’ according to François Carrière.’ I would advise investors to consider the competing offer, and there are plenty of those around, and to set aside a significant amount for management. However, investing is good business. This is the lowest prices have
been for the last ten years. There is little chance of losing value in the medium-term.'