Real estate in Spain: Madrid and Barcelona are also starting to sell
At a time of transition for Spain also from a political point of view, the real estate market is increasingly feeling the pressure of sales, with only large cities resisting the drop in prices. However, after the increases of recent years, these locations are also starting to see declines, even, if not especially, in the commercial and office sector, as reported by Vanguardia.
“We believe that average office prices should end up falling by 20% and that house prices should fall by 7%,” says Singular Bank's head of strategy, Roberto Scholtes, when asked about Barcelona and Madrid. “ The market is very poor” because now “buyer and seller cannot meet ,” he says. They will do it sooner or later and the prediction is that it will be for the whole of next year, in a cheaper place than the current one.
The drops are visible on a quarterly basis and, in the case of Barcelona, on an annual basis
Scholtes' forecasts of falling prices are not the only ones, even if there is no firm consensus among analysts, especially when it comes to Barcelona and Madrid, the two cities with areas of tension par excellence. On a national scale, Bankinter's forecast is that housing will increase by 1.2% this year and fall by 2% next year. These are fluctuations so small as to be irrelevant, if compared with other European countries, and so far they have been proven wrong.
The latest quarterly report from the College of Chancellors, published this week, shows that the average price per square meter in the city of Barcelona is now 4,318 euros, 0.8% less than a year ago, while in Madrid there are further increases, of 4.3%, even if its square meter is cheaper and stands at 4,017 euros. At the end of last year, prices had increased by 6.3% in the city of Barcelona and 7.1% in Madrid, which shows that, at the very least, the slowdown is evident.
Demand has moved to the periphery
The registry offices have already detected decreases in the quarterly comparison, even if in this case the data does not correspond to the capitals, but to the province. In Barcelona between July and September there was a drop of 0.6% compared to the previous quarter, while in Madrid the drop was 0.8%.
The transactions give another clue to what is happening in Spain's two largest cities. The capitals have reduced their weight in home sales compared to their respective provinces, after several quarters of increases. It's a sign that demand is moving to the suburbs, where prices are already starting to cool. There is no longer much willingness to pay high prices.
Decline in office prices
Transactions in the office sector fell by 72% in Barcelona and 34% in Madrid. “Sellers are reluctant to lower prices, but buyers are already patiently waiting for the adjustment to occur,” expected in the first half of next year, he says. In this situation what happens is a freezing of the market, because supply and demand no longer meet, waiting for sellers, cornered, to begin to give in and prices, at that point, to collapse.
As for housing, Idealista in Spain continues to detect increases in Barcelona and Madrid, although the data concerns properties for sale and not those definitively sold. So, here too, it is a question of desires, not reality. If there are any price reductions, developer Culmia believes they will be small. His forecast is rather one of "stability", since at the center of the real estate market, in the urban centers of the two cities, he says, there is still little supply.
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The article Real estate in Spain: Madrid and Barcelona are also starting to collapse comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/immobiliare-in-spagna-anche-madrid-e-barcellona-incominciano-a-cedere/ on Sun, 19 Nov 2023 11:00:18 +0000.