Is a property a good investment in Barcelona?
Will the prices of properties in Barcelona continue to fall? Is it better to wait longer or buy a property now? Is it a good investment? These are the most frequently asked questions in the real estate market in Barcelona. And yes, the prices in Barcelona are very good, but they could change at any time. You must consider some aspects like as interest rates, mortgage payments, tax benefits, stock market, and others…
If you are planning to invest in residential property in Barcelona, keep reading this article. We tell you everything you need to know.
Is buying property a good investment?
The refuge of investors
Buying a home is a good option for large and small investors looking for profitability. In 2021, the real estate market in Barcelona is called to be the refuge of investors, since, according to the consultancy CBRE, it’s expected to grow up to 25% compared to 2020, with transactions of between 10,500 and 12,000 million euros.
This is because the sector has weathered the Covid-19 crisis reasonably well. During 2020, both investment and interest from foreign funds in the Spanish market have been sustained and, in addition, sectors such as rental housing are attracting more resources than ever.
In the specific case of Barcelona, it continues to be one of the world’s preferred places to live and work according to The World Best Cities 2021 ranking. Therefore, it’s a good time to invest in real estate in the city.
There are different real estate investments: buying a home and selling it, acquiring a property to rent it out, or even reforming it, making the most of it, and selling it at a higher price. But, first, it’s necessary to meet certain conditions for the operation to be a success. We recommend you:
- Make a study on the price and the revaluation of the area
- Don’t pay more than 30% or 35% of your salary
- Do a study on the mortgage that suits you best
- Collect all the information with financial entities
- Evaluate what are the advantages of buying a home to reform
- Review all the taxation that accompanies the purchase of the property
- Don’t forget about extra expenses
- Choose the area well
Is it a good time to buy an investment property?
This year has been very good for the real estate sector. After all the economic situation of Covid-19, GDP is predicted to rise more than 6% in the year 2022, which is a favorable scenario for real estate investments.
Therefore, these last moments of the year 2021 are good times to make real estate investments in Barcelona. Also, Barcelona properties’ prices have been low since mid-2020. This is another good reason to make a real estate investment in this great city.
Another reason is that Barcelona is considered one of the best cities in the world and is in the report of The World’s Best Cities 2021. You also have to bear in mind that it has been labeled as the World Capital of Architecture by UNESCO for the year 2026.
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Is it better to invest in apartments or houses?
When investing, you will have to take into account many things, not only the investment loan. You will also have to choose the type of property as well: house or apartment. To make a good choice, you will have to take the following into account.
A property in a good location is everything. In other words, an apartment in a perfect location is much better than a house in a bad location.
Think about the importance of being close to the beach or services such as shopping centers, restaurants, and parks. You also have to consider the areas with much more demand to ensure that you invest in a good place.
Trends in the market for houses and apartments
You must consider the situation in the market of the two types of properties to know what results each one will have.
Advantages of investing in a house
1. Capital growth
Houses tend to have higher long-term growth, more than apartments. However, it will also depend on the area, this is why it’s important to consider it as well.
2. Flexibility to renew
With a house, you can have better control of renovations because you don’t need the approval of the corporate entity.
3. More reliable rental returns
Homes attract more families and couples, who tend to be more reliable and tend to stay longer. In addition, people with pets also prefer to rent a house, since the space is much more comfortable.
Advantages of investing in an apartment
1. Affordable purchase as an investment
Apartments are usually more affordable than houses, which is why it attracts investors much more. In addition, apartments are often located near the city or in the very center of it, and it means they will be in high demand.
2. Shared maintenance costs
The maintenance costs of the apartments are shared, not like in a house. This means that corporate rates are charged for common areas.
However, you will always have to have your own insurance.
3. They are easier to manage
Apartments are frequently landless, and that means it is much easier to manage. In addition, these are frequently smaller than a house, so cleaning and all its management take less time.
Can an American buy a house in Spain?
The only thing you must have to be able to buy a home in Spain is the NIE (Foreigner’s Identification Number). It’s about having a personal and unique number that foreigners are always asked for when they want to open a business or buy a home.
And if you wonder if it’s mandatory to have a bank account in Spain, the answer is no. However, this would make paying taxes and expenses much easier.
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Best areas to buy a house in Barcelona
We could say, in general terms, that the most profitable neighborhoods in Barcelona are those that have the cheapest purchase prices, something that also happens in other large cities such as Madrid.
The second most profitable district in Barcelona to invest in housing would be Sant Andreu with a profitability of 5.1%, an area that has a purchase price per m2 of 3,161 euros.
As with Nou Barris, Sant Andreu is one of the cheapest neighborhoods in Barcelona to live in, so investors who decide to acquire a property in this district will be able to do it without having to make an economic outlay as high as they would have to invest in other areas of Barcelona.
The third most profitable district of Barcelona to invest in housing and the third most economical district to acquire a property. In Horta-Guinardó, investors who decide to rent out their properties will be able to opt for a 4.7% return.
In Horta-Guinardó we can find houses well-connected to the center but isolated from the crowds of Barcelona, something highly sought after, especially in current times when teleworking allows many people to work from their homes.
Profitability in Sants-Montjuïc is currently the same as in Horta-Guinardó, 4.7%.
In Sants-Montjuïc we find Carrer de Sants, the street with the most shops open per square meter in the world. In this district, we also find Estació de Sants, one of the logistics arteries of Barcelona.
One of the best points of the city. The transport infrastructure and services justify the high demand in this area. In Ciutat Vella, the profitability of 4.2% can be achieved when buying a property to put it on the rental market.
Investing in housing in the center of Barcelona is betting on high profitability in the short term.
Gràcia is the smallest district in Barcelona but the second with the highest population density. 120,000 inhabitants live there. Investing in Gràcia allows you to achieve rental profitability of 4.2%. There, the price per square meter stands at 4,186 euros.
Sant Martí has several neighborhoods, many of them old towns annexed to Barcelona such as La Verneda, Poblenou, El Clot-Camp de l’Arpa and the Barri del Besòs and el Maresme.
The profitability in Sant Martí is also 4.2%, and buying a property there represents an investment of 3,541 euros per square meter.
And little by little we are approaching the most expensive neighborhoods to live in Barcelona. In these regions, the profitability achieved by renting is less bulky due to the large outlay that investors have to make to acquire an asset.
In the district of L’Eixample, you can find both small apartments of 50 m2 and stately homes that exceed 500 m2. Investing in the Eixample is betting on one of the liveliest areas. Here are some of the great avenues such as Rambla Catalunya, Paseo de Gracia or Enrique Granados street.
The price per square meter in the Eixample stands at 4,492 euros, and the profitability that can be achieved with the rent is 3.7%.
Les Corts is one of the districts that has increased the price of its properties the most in the last year. Specifically, throughout 2020 the value of its properties has risen by 2.18%.
Perhaps this is why investing in Les Corts achieves one of the lowest returns to Barcelona, specifically 3.7%.