Barcelona Property Investment: Where are the Best Areas to invest into?

17 April 2016, Comments 0

Barcelona city in Spain is divided into 10 districts. We have ranked them by the income return meaning how much you can rent your property versus its current price in Q1 2016. In 5 districts you will get an annual income yield at around 6%, then in 2 districts (Sant Marti, Eixample) 5%, to finish with the most expensive ones at 4% (Sarria, Les Corts).

Mar-16 Price per sqm Rent per sqm Rental Yield
Nou Barris 1,775 10.4 7.0%
Horta Guinardo 2,302 11.6 6.0%
Sants Montjuic 2,652 13.2 6.0%
Gracia 3,163 14.9 5.7%
Ciutat Vella 3,765 17.7 5.6%
Sant Andreu 2,172 10.1 5.6%
Sant Marti 3,382 14.2 5.0%
Eixample 4,050 16.0 4.7%
Sarria Sant Gervasi 4,598 15.3 4.0%
Les Corts 4,486 13.6 3.6%
Barcelona 3,478 15.2 5.2%

The other important factor in a property return though is the capital gain as there have been a lot of price volatility in the last 10 years.

Barcelona property prices reached their historical peak in Q1 2007 at 4 732 euros per square meter then with the global credit crunch the bubble burst and prices lost 60% to reach a bottom in Q3 2013 at 2 957 euros per square meter. Since then Barcelona property prices have increased 18% currently at an average of 3 478 euros per square meter.

When you analyse then this price movement per district you observe that this price correction was much more important for the cheapest areas of Barcelona Nou Barris and Sant Andreu at around 90% whereas expensive areas have decreased around 40% for the eixample, sant Marti and Les Corts. The price recovery has been the highest in the district of Ciutat Vella at 26% followed by Sarria Sant Gervasi.

District 1q 2007 3q 2013 bubble burst 1q 2016 recovery
Ciutat vella 4,607 2,980 55% 3,765 26%
Sarrià-Sant gervasi 5,755 3,839 50% 4,598 20%
Barcelona 4,732 2,957 60% 3,478 18%
Eixample 5,124 3,550 44% 4,050 14%
Les Corts 5,469 4,019 36% 4,486 12%
Sant Martí 4,505 3,126 44% 3,382 8%
Sants-Montjuïc 4,314 2,482 74% 2,652 7%
Gràcia 4,718 3,022 56% 3,163 5%
Horta Guinardó 4,088 2,316 77% 2,302 -1%
Sant Andreu 4,177 2,233 87% 2,172 -3%
Nou Barris 3,754 1,952 92% 1,775 -9%

Spain’s economic growth forecast in 2016 continue to be among the highest in the eurozone at around 2.7%. The only negative aspect remains the current political instability in Spain where the previous government remains in place due to 4 parties which won the election but can’t agree to form a new government. Some big real estate firms forecast that Barcelona housing prices will grow by 6% in 2016, the key question will be in which district…

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