The residential market in Barcelona has resisted the covid crisis and expects to grow again this year. During 2020, this sector registered a fall of 18% in the province and 24% in the capital. This represents the sale of 48,800 and 11,200 homes, respectively, with second-hand leading the way.
After these figures, the forecast is to reach 51,000 homes sold this 2021 throughout the province, 5% more than last year, according to a report by the real estate consultancy CBRE.
Having absorbed the impact of the pandemic, the residential market has reached levels similar to those of 2016, a completely different position from the one it had when it faced the 2008 crisis. Basically, because there is no oversupply of housing.
Likewise, during the first months of the year, a positive trend has already been registered. "For the second half of 2021, we estimate that this positive trend will continue upwards," remarks the director of the CBRE office in Barcelona, Xavi Güell.
Supply grows
The CBRE report indicates that the volume of finished housing during 2020 increased by 6% compared to 2019, exceeding 9,000 completed units. "The guarantee of continuity and execution of many ongoing works, as well as committed deliveries, are a sign that the number of finished homes in Barcelona has not suffered any substantial impact from covid-19," Güell defends.
However, the number of new construction, expansion, and renovation permits fell by 18% in the province of Barcelona, with about 14,000 permits in 2020. Of these, only 8,500 were for new construction, 24% less than a year ago. The capital registered a smaller fall, of 17%, and exceeded 3,700 new construction permits. This behavior is due to the effect of confinement and the uncertainty caused by the pandemic, causing developers to slow down the construction of new projects.
Limitations
The transactions made during 2020 were widely distributed among the municipalities of the province of Barcelona. Thus, more than 40% of the homes sold were concentrated in Barcelona, Sabadell, L'Hospitalet de Llobregat, Terrassa, and Badalona. The latter stood out especially, reaching levels similar to those of 2004-2006, with more than 750 new construction homes sold. For Güell, this high demand registered in Badalona and other municipalities in the metropolitan area is explained by the limited supply that exists in the Catalan capital, which can no longer grow further.
Badalona sold more than 750 new-build homes, reaching levels similar to those of 2004-2006Another factor that also characterized the Barcelona residential market last year was price behavior. As for housing, it adjusted both in the province and in the city, with decreases of 1% and 3%, respectively. For this year, prices are expected to stabilize, with variations between 0% and 1%.
On the other hand, rental prices decreased by 17% year-on-year, with an average rent of 14.5 euros per square meter, as of April 2021. This last figure is understood by the impact of the crisis on tourism, which has emptied tourist apartments, explains Güell. For this reason, the director foresees that this trend will change when the sector reactivates.
280 million investment
Barcelona maintained its second position at the state level in residential investment, with 17% of the total volume of transactions. The figure amounted to 280 million euros, only behind Madrid, with 1,148 million ---67% of all transactions---.
This trend is expected to continue and be surpassed this year in the Catalan capital. Güell emphasizes that a very positive number of investments has already been registered during the first quarter, both in properties for rent and for sale. The same volume of investment as in 2020 has been reached and is approaching that registered during 2019. "We predict a growing trend in the coming months," he explains.