Will the prices of flats in Barcelona rise?

Will the prices of flats in Barcelona go up? Is it a good time to sell my home? And what about buying a home? These are the million-dollar questions that we answer in this post, as well as giving you some real estate tips.

9 June 2015 by Monapart

Take a look at this chart showing the evolution of flats in Barcelona for the last 15 years:

Will the prices of flats in Barcelona go up? | Monapart

Let's see:

A flat 15 years ago cost about €1,100 less per m2 than it does now. An 80 m2 flat could cost around €161,000, i.e. €2,000/m2.
In 7 years (between 2001 and 2007) the price of housing in Barcelona doubled (in fact it multiplied by 2.35). The new price of our show flat became 378,400 €.
In 7 years (between 2007 and 2014) the price of housing in Barcelona fell by 45% and remained, approximately, halfway to the rise experienced in the first 7 years of the 21st century. Therefore, our beloved typical flat would sell for 261,000 €, that is to say, today that flat we bought in 2001 could be sold for 100,000 € more (provided it was in comparable conditions, of course).
The price of housing has increased in Barcelona between 2001 and 2015 by 62.3%. Let's not look at what happened in between...

Let's look at what happened between 2004 and 2014 (the latter being the last full year available). Economists often talk about 10-year business cycles. I am not an economist, but 10 is a nice number, isn't it?

We can see that a property in Barcelona sold for practically the same price in the last quarter of 2014 as it did in the first quarter of 2004. Surely the difference is that the advertised price with respect to the final price of the transaction was a little lower 10 years ago, but I'm not sure because in real estate terms, I wasn't born yet. The question we would all like to answer is: What will happen to the price of flats in Barcelona from now on? Let's zoom in on the graph and see what has happened in the last two years:

According to the data, house prices bottomed out in the third quarter of 2013, so we have now had six consecutive quarters of growth. It is a small but steady rise and, in a way, revealing. The optimism in certain political and economic environments may be influencing the mood of sellers, buyers and professionals in the sector.

If there is one factor that has influenced the revival of sales and this modest rise in flat prices, it is the opening of the financing tap.

Banks are anxious to sell mortgages, because selling insurance is all very well, but there is more to be gained from mortgages. By Keynesian logic, the availability of finance drives up demand for housing because it increases the critical mass of potential buyers.

And now, yes, I will answer the questions you may be asking yourself, without any hesitation and without circumlocution:

Will the prices of flats in Barcelona rise? I think that yes, prices will continue to rise. I am not able (and I don't think anyone else is) to predict for how long (maybe 10 years ;-), but I dare say at what average price per m2 will stabilise in Barcelona. Ready? Ready? Here I come! Around 3.700 €/m2. Soon in another post I will explain the basis for my boldness, lest I get stoned for having said this and I don't want to write any more. Once we reach this point, prices should rise strictly in line with general price developments and not at the margin, as has been the case for the last 15 years.
Is it a good time to buy a home? The answer is obvious. It is, as long as you accept my prediction. However, I believe that there is not and never will be an optimal time to buy a house. You should not base your decision on market timing alone, which in my opinion is the weakest and most unpredictable leg of the triangle, but rather approach your decision based on the nature of your need and your financial situation. Moreover, you already know that looking for a flat is like looking for a partner…
Is this a good time to sell my home? It depends on why you are selling. If you are selling to buy again, any time is a good time because the price of your sale and the price of the new purchase will be correlative. Forget about making money selling to buy again, you will only achieve this if you sell in a very consolidated area to buy in a "new" area or one with revaluation potential. If, on the other hand, your sale depends on paying off a mortgage from the peak price years (according to the first of the graphs presented), I think it is much better to wait for my predictions to come true. At that time you will owe less money to the bank and you will be able to sell at a price that will allow you to recover maximum value.

In a nutshell:

House prices will rise for some years to come, provided there is no systemic cataclysm, either local or global.
If you're thinking of selling, you'd better talk to Monapart ;D (or any professional you trust who has a bit of experience with it). I'm sure you'll get something out of the conversation and at least we'll help you avoid these common mistakes (Five reasons why your flat won't sell). After all, we almost never decide based on rational arguments...
If we ignore the years of economic frenzy in our country and take a global picture of the evolution of housing prices, we can affirm that the price of housing in Barcelona has had a reasonable and coherent evolution with the rest of the consumer goods. A coffee in 2001 cost about €0.60 (about 100 pesetas, or 20 duros). Nowadays it can cost €1.20 in a cheap bar, so while coffee has increased by 100%, housing has "only" increased by 62%.
Housing is a basic necessity and should never again be subject to speculation.

Will the prices of flats in Barcelona go up? Is it a good time to sell my home? And what about buying a home? These are the million-dollar questions that we answer in this post, as well as some other real estate tips.