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Property focus: Investment opportunities in beautiful Barcelona

By LLM Reporters on 27th October 2020

Looking for an investment property in Spain this year? Whether it’s a holiday home or a rental property you’re after, the opportunities are endless – and if you’re looking for a lucrative addition to your property portfolio, then look no further than Barcelona.

One of the nation’s most vibrant and cosmopolitan cities, Barcelona is known for its incredible architecture, great shopping and mouth-watering cuisine. It also happens to be one of the most sought-after places to live in the entire country, making it a great place to invest your cash.

In the global financial crisis of 2007-09, Spain was one of the worst-hit, experiencing a shocking 8.9% contraction in its GDP as a result. Even so, it did well to recover in the following years, and once again became a thriving hub for tourism and culture, attracting visitors from the world over. It also became one of the main contributors to Eurozone growth, following six years of consecutive GDP growth between 2013 and 2019.

The property crisis meant that the sector became more transparent, with the overall level of quality and professionalism much improved. Offering low interest rates, competitive mortgage packages and attractive property prices, it’s little wonder Spain has been such a popular choice amongst investors.

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Barcelona is known for its incredible architecture, great shopping and mouth-watering cuisine. Image credit: yulia_serd/Bigstock.com

But just when things were looking more certain for the nation, the coronavirus pandemic threatened to reverse this long-awaited upturn, with the government announcing a £200 billion package to support companies in what Prime Minister, Pedro Sanchez described as “the biggest mobilisation of resources in Spain’s democratic history.”

As a whole, Spain has been at the receiving end of great interest from the international investment community as foreign direct investment (FDI) falls elsewhere around the world. In 2019, the country celebrated a record-breaking year for inbound greenfield FDI, largely thanks to its thriving real estate sector, which attracted 101 investment projects in 2019 alone.

The presence of these international investors has been a catalyst for recovery, and today, they are becoming increasingly involved with local developers and their residential projects, providing the financial expertise to complement the developer’s local market expertise.

Barcelona, in particular, has been a subject of many such projects, and remains one of the favourite investment locations for those looking to expand their portfolios. Currently, there are a plethora of beautiful properties for sale in Barcelona city, making it a great time to snap one up. Or, if you’re feeling particularly flush, let’s call it a few.

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There are a plethora of beautiful properties for sale in Barcelona. Image credit: Brian K/Bigstock.com

Why Barcelona?

Prior to the Covid-19 pandemic, we had been seeing promising recovery for several years within prime city districts. Spain remains one of the most popular tourist destinations in the world, meaning there will never be a shortage of those looking for short term holiday rentals or luxury Air BnBs – and also home to thousands of expats, from the UK and otherwise – there’s unlikely to ever be a shortage in demand.

Even so, property prices remain significantly lower within Barcelona and the wider Catalonia area than many other prime European cities, offering attractive commercial opportunities for investors.

The up-market central district of Eixample has consistently seen steady growth in recent years, and has been the least impacted by the financial crisis, recovering more quickly than most. This makes it a great choice for investors in the area who are looking for a lucrative and well-priced buy.

When it comes to expats, many choose to live outside the main city, along the Barcelona beachfront areas of Diagonal Mar. The Maresme Coast offers more bang for your buck, while the cosmopolitan town of Sitges is always in high demand. Both are located less than 30 minutes from the centre of Barcelona, and offer a range of interesting investment opportunities.

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Barcelona Old Town is currently witnessing a surge in house prices

Property trends in Barcelona

Over the past few years, many property sales made in Barcelona have been for new or newly renovated properties, and even now, the demand for centrally located, ‘lock-and-leave’ properties remains high. These ‘ready-to-move-into properties offer good short-term rental yield as well as long-term capital appreciation, so whether you plan on living there yourself or renting out for profit, it’s a good option that is sure to produce the result you want.

Currently, supply in Barcelona is failing to keep up with demand, with areas including Barcelona Old Town and Eixample seeing the fastest growth. On the outskirts of city, the vibrant seaside town of Badalona is an up-and-coming choice that has recently undergone major generation, making it a savvy investment choice for the future.

Average property prices in Barcelona

As of October 2020, the average price for property in Barcelona stood at £402,041 – a rise of 4.59 per cent in the last three months, and an increase of 14.17 per cent over the past year.

The bottom line

If you’re thinking of investing in a Spanish property or two, then there’s no doubt that Barcelona is the place. With a range of luxurious homes to choose from, as well as a selection of sensible rental properties, you’re certain to find what you’re looking for – and are likely to make some great returns on investment over the coming years.