TOP 5 REASONS TO INVEST IN BARCELONA’S LUXURY PROPERTY MARKET
Upon the bursting of the housing bubble in Spain in 2008, the industry underwent a significant adjustment process. It took up until 2014 for the situation to stabilize and open a new horizon for international investment funds, who saw a great opportunity in the acquisition of bank properties. Such an injection of money into the real estate market, along with the increase of new developments, inherently aroused the interest of more and more international investors. Nowadays Barcelona positions itself as one of the most interesting European cities to invest in the property market. There are countless whys and wherefores, ranging from financial to lifestyle reasons. Not surprisingly, many individuals are coming from all over the world, depositing their trust and heart in this Mediterranean city. In a conversation with Alexander Vaughan, co-founder of Spain’s leading luxury real estate firm Lucas Fox, we discuss the top five reasons why investing in Barcelona’s luxury property market is a smart financial and personal choice.
1. COMPETITIVE PRICES
While Barcelona is one of the most expensive cities to invest in Spain, property prices are still quite undervalued, meaning there is a lot of potential for growth predicted for at least the coming five years. The price point which is very appealing when comparing to
other international cities such as London, Paris or New York- in addition to the growth forecast, make Barcelona one of the most attractive markets to invest in real estate today.
2. NEW PROPERTY DEVELOPMENTS
In the last couple of years Spain, and more particularly Barcelona, is experiencing the rise of new property developments which has been unseen ever since the real estate crisis hit in 2007. While large international funds drive many of these new developments in alliance with local developers, those new promotions are perceived as a safer investment. Furthermore, such an investment option usually brings good payment terms: the buyer can do the payment in different stages of the construction process, allowing the investor to speculate on some capital growth throughout the completion process. Within this context, the investor is secured through strong legal contracts and bank guarantees provided by the developer.
3. GOOD RENTAL MARKET
The dynamics are changing, and Barcelona is experiencing an increase in an interesting rental market that did not exist before the crisis. While during that period the rental market was a short-term/touristic rental, now the trend is changing towards a long-term rental market due to the increase of young people renting versus buying. Such fact, plays very in favor in all the big international cities, driving more investments into the real estate market. “What we see is international investors buying new developments, speculating over the construction process and once the property is ready they put it into some management property agency to rent it out” -says Alexander. At the moment, the projections are quite attractive being this 4-5% return in the long term.
4. GOLDEN VISA
Another smart reason to invest in Barcelona is the golden visa, which is a permanent residence permit for anyone coming from outside Europe and investing more than 500,000 € in a property. “It’s quite like the scheme that started in Portugal already in 2012, which was hugely successful. You have a few American clients who take advantage of it, a lot of Middle Eastern or a few Asian clients, to mention a few examples. It is a very straightforward way to get a residence here”- adds Alexander. Barcelona is one of the best-connected cities in the world. Since the opening of the new T1 airport terminal, there has been nothing but an increase of international airlines settling down in best known Aeroport del Prat. A great advantage of the Golden Visa is that allows you to travel freely within the Schengen area and the conditions to get it are not too restrictive. These include official identification documents such as the passport; criminal record; the property purchase has to be in cash and finally, proof of sufficient financial means to support the family lifestyle during the stay. The outcome is nothing but an increase of international investors buying in the city of which for Lucas Fox results in 60% Europeans buyers, and another 40% non-Europeans, originating from America, Middle-East, Russia, and more and more clients from Asia.
5. HIGH-QUALITY LIFESTYLE
It’s common to hear that Barcelona has it all in terms of lifestyle, reason why its popularity is never ceasing but increasing. Uplifting climate, splendid beaches, astonishing mountains, fun nightlife, great shopping, inspiring art, millennial culture and world-class gastronomy. Moreover, there are many beautiful and exciting places to visit not far from the city. Think of the charming coastal town of Sitges, the fisherman’s village of Cadaqués -where artist Salvador Dalí had his summer house, or even Andorra, a skiing and shopping paradise a stone’s throw away from the capital of Catalonia. Add on top a growing range of luxury concierge services to cater the most demanding audience that continues to settle down in Barcelona. “What is happening in the last few years is that people are starting to take a different approach to property investment. They think about investing somewhere where it works in terms of lifestyle yet being also a financial decision. So, most of the clients that we have at Lucas Fox invest in Barcelona because they like the city and not only for return. For such a new phenomenon we decided to coin the term ‘lifestyle investment,’ a few years ago,” says Alexander. Considering that all the lifestyle factors extend beyond the city itself -making it a fascinating destination- Barcelona is and will continue to be, one of the most appealing markets to invest in, thinking for the pocket but also for the soul.