Real Estate

How a dearth of tourists has transformed Barcelona’s property market

Barcelona is slowly waking up. Tourists are still largely absent and three-quarters of hotels remain closed — many may never open their doors again. But the warm days and lifting of the lockdown curfew at night is seeing the return of a more familiar buzz to the streets.

“People are enjoying being out walking in the sun, having lunch, shopping, without the tourist hoards, which can be overwhelming,” says Mark Stucklin, a longtime British resident in the city and the founder of the advisory website Spanish Property Insight.

The lack of tourists is also having a profound effect on the city’s property market. Since the start of the pandemic, rental prices have plummeted in Barcelona as desperate holiday-let landlords have flooded the market with empty apartments, and city-centre renters have decamped to the outskirts looking for more space and greenery.

In April, the average monthly rental price per sq m in Barcelona was down 16.5 per cent year-on-year to €14.50, according to Idealista, a Spanish property search site.

A fiesta celebrating the end of the Covid curfew in Barcelona this month
A fiesta celebrating the end of the Covid curfew in Barcelona this month © NurPhoto via Getty Images

While this is bad news for landlords, for local renters such as Helena Ruiz, a 38-year-old office manager, the drop in rents has allowed her to upgrade. She and her husband rent a 40 sq m, one-bedroom flat in the Eixample neighbourhood for €975 a month. They can now stretch to a three-bedroom flat of twice that size in a better part of the area for about €200 more a month.

“Before rents fell, we couldn’t have contemplated it,” she says. “We thought we’d have to move out to the Maresme coast, north of Barcelona, after 10 years of working and living in the city, which didn’t seem fair.”

“People who were paying €500 [a month] for a room in a shared flat a year or so ago can now rent their own flat for €600,” says Juan Pedro Mellado, from Zona Pisos estate agency in El Born.

What is more, in September last year, to curb rampant rent increases — the average rent in Barcelona rose 43 per cent between 2013 and 2019 — Catalonia introduced new rent-cap laws to dictate the average rent that can be charged based on the size, location and condition of the property.

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As holiday-lets lie empty, there are opportunities for buyers: in the Barrio Gótico, a377c5240-b3e1-11eb-b482-93267f2f3df5, four-bedroom flat sold for €490,000, having been initially marketed for €840,000
As holiday-lets lie empty, there are opportunities for buyers: in the Barrio Gótico, a four-bedroom flat sold for €490,000, having been initially marketed for €840,000 © Bloomberg

“The feeling from locals has always been that we lost the city centre to tourism and foreigners,” says Alberto Román, a freelance data analyst. “The rent cap has been key to getting back the city centre. Foreigners don’t have the advantage of just being able to offer more money.”

But the pandemic has also created an opportunity for the city’s okupas — or squatters — who see empty holiday lets, many of them owned by absent foreigners, as easy targets. “This is slowly becoming a real problem,” says Pascal P Bourbon, managing director of Barcelona Properties.

“In [the first half of] 2020, Catalonia had almost 4,000 squatters in flats or houses, six times more than Madrid, according to the ministry of the interior.”

With the local Catalan government accused of being soft on squatters, many property owners who find their homes “occupied” face tough decisions. “The [legal] system is so slow and costly for property owners that it’s often easiest to pay the squatters a few thousand euros to leave,” says Stucklin.

Las Ramblas last month: as they come out of lockdown, residents are starting to enjoy Barcelona again
Las Ramblas last month: as they come out of lockdown, residents are starting to enjoy Barcelona again © Europa Press via Getty Images

Though often thought of as young, anti-capitalist activists, Stucklin says many squatters have no political affiliation, and are sometimes members of criminal gangs who use the properties as drug dens, or narcopis.

The problem is citywide, he says, but the central area of El Raval, parts of which are still rather rundown, is a particular hotspot for gangs, who have taken over entire buildings. “The extortion model works well in upmarket areas such as Sarrià or Eixample,” says Stucklin. “They want absent owners with money.”

WKD Travel - Barcelona map

Professional companies, often called desokupas, have emerged to evict
squatters — though the legality of some of their methods has been questioned. Typically these companies charge a flat fee of€3,000-€6,000.

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With interest from overseas investors diminished, those willing to buy in their old haunts — typically the Old Town and beside the beach — have been able to secure huge discounts.

Tine Mathiassen, co-founder of Casamona estate agency, recently sold a top-floor flat with a private terrace in El Born district for €85,000, after it was priced at €180,000. Nearby, in the Barrio Gótico, a 120 sq m, four-bedroom flat complete with “designer furniture” sold for €490,000, having been initially marketed for €840,000.

Some families have sold small city-centre flats to live in large houses with gardens half an hour away on the Maresme coast
Some families have sold small city-centre flats to live in large houses with gardens half an hour away on the Maresme coast © Alamy Stock Photo

Mathiassen’s past five sales were to young overseas buyers who have a salary from their home country but enjoy the Barcelona lifestyle. “They are digital remote workers, ranging from American IT techies to Norwegian poker players, and they choose Barcelona because you still get a lot for your money, plus relatively low living expenses and low taxes,” she says.

She mentions one recent American customer who has bought a 40 sq m flat in El Born for €135,000 “and is renting it out for €800 a month to cover her mortgage until she can move here”.

City-centre stock is further being freed up by families who have sold small apartments to live in large houses with gardens in towns half an hour’s drive or so away on the Maresme coast, where estate agency Lucas Fox reports a 65 per cent increase in sales between March 2020 and 2021.

“We were paying €1,750 a month to rent a small flat in Poblenou — and we counted ourselves lucky during lockdown that we had a small patio for the children to play. But we were desperate for space and greenery,” says Laura Foster, an English teacher, originally from Liverpool.

The family has since moved to a four-bedroom house in Vilassar de Dalt, 20km from central Barcelona, with a garden and pool, for €410,000.

High-end buyers are also finding some opportunities, says Mohammad Butt of Lucas Fox, who recently made a sale using videoconferencing
technology to an overseas buyer who paid €200,000 less than its €2.9m asking price.

Knight Frank agent Oliver Banks is also dealing with “young techies with very healthy budgets” of €3m-€5m who are looking for large, modern properties with amenities such as swimming pools.

As the city comes out of its lockdown slumber, foreign buyers, local renters and its notorious squatters are all seizing their opportunities.

Buying guide

  • Property prices fell by 3 per cent in Barcelona in the year to end February 2021, but prices rose by 1.7 per cent in Barcelona province, as many city dwellers moved out (Generalitat de Catalunya).

Properties for sale: Barcelona

Apartment, El Raval, €575,000

A one-bedroom, one-bathroom apartment in a converted factory in the historic centre of Barcelona. The property, which measures 58 sq m, has an open-plan feel, with many preserved period features. Available with Urbane International Real Estate.

Loft apartment, El Raval, €393,000

A one-bedroom, two-bathroom loft-style apartment near the Sant Antoni metro station. The property, which measures 100 sq m, has wooden floors, exposed brick walls and high ceilings. The flat is on sale through Engel & Völkers.

Luxury penthouse, Eixample, €12m

A four-bedroom, five-bathroom penthouse measuring 572 sq m, and with an additional 128 sq m terrace. The property is located on the Passeig de Gràcia, just down the street from Antoni Gaudí’s Casa Milà building. Available through Sotheby’s International Realty.

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