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Thursday, November 2nd, 2017

The sale of new real estate properties is back on

Real estate report- 1st half of 2017

According to the data collected by Amat in a real estate report, during the first half of 2017, the property sale market in Barcelona and its metropolitan area had been very active.

However, what we will see later on, if we want to talk about price and real estate value, we need to rely on the real economy and not on data expectations of price growth as the price limitations are very well established.

The state of the properties

Within the real estate offer, we need to differentiate between “newly built properties” and “second hand properties”.

Regarding the offer of newly built properties, the city of Barcelona and its metropolitan area consists of numerous construction projects, while the supply of second hand properties is much lower and is divided between different real estate agencies. Another problem that affects this offer is the asking price for the second hand properties in the city of Barcelona, which in some cases, is too high.

Information on the sale of properties

In general, the number of property sales has increased by 47% compared to the first half of 2016. However, how much are new builds compared to second hand properties? Regarding the same period of 2016, this year it has reached a 16% increase concerning second hand properties sales, compared to 61% with new builds.

Second hand properties: price evaluation

It is not easy to do a thorough analysis, since all the properties do not have the same characteristics, they are not located in the same area and they are not in the same conservation state, which are factors that makes the price vary.

In Barcelona, since 2014 prices are increasing at average of 2% a year, the same as in Sant Just Desvern and its surrounding areas. In this case, it is a smaller market with respect to other cities, but better established, which makes the price range not as excessive.

There is a special case in Sant Cugat, as the crisis had a negative effect on this towns property market which had fantastic conditions on offer, which made the prices plummet (according to the data that we have, it was a 70% drop), maintaining, for a while, below the average property value in the city of Sant Cugat, where many services can be found. Currently, the value of properties is similar to that from before the crisis, recovering a 67% price, which makes a 15% yearly.

Newly built real estate properties

This market sector is still very active. As previously mentioned, during the first half of 2017 there has been a 61% increase with respect to 2016. But, what are the main market characteristics for a new build in the metropolitan area of Barcelona?

 

– There are a lot of projects scheduled for the end of 2017 and 2018 in Barcelona and its metropolitan area, slightly smaller although this is more important in the city of Barcelona and slightly larger around the outskirts, such as, in Hospitalet de Llobregat, Sant Cugat, Badalona and Sant Just Desvern.

– The appearance of newly developed areas in towns in close proximity to Barcelona, but also municipalities further away, such as, Sabadell Mataró, etc.

– The biggest competition of the promoters in the same area as the first ring of Barcelona.  

– The monthly average of property sales is 8-10.

– The typical profile of the buyer is (95%) national buyers, with an average age of 43, although more and more foreign buyers are appearing.

– Many buyers are already from the city of Barcelona, especially those who are interested in housing development in Sant Just Desvern.

– 74% of buyers prefer to finance the purchase of a property.

 

Market based on the real economy

As we mentioned at the beginning, it is ideal for the real estate market to be based on the real economy, as this way, we can avoid the stagnation of the sector or the crisis, therefore it is important to know how far the potential buyers of the economy will go. However, in order to rely on the real economy, we should keep in mind the price of land, a price that is currently overestimated. The key would be to control the price of the land and, for this, it is essential to have correct urban planning that does not increase the price of the land and, therefore, the price of the houses.

If you would like to read the complete report, you can do so through this link.

 

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