Previsión del mercado inmobiliario de Barcelona en 2023

Are you looking for information on the real estate market forecast for 2023? Discover the 8 trends that will determine whether 2023 is the year to buy, sell or invest in real estate in Barcelona and Spain.

Will recession rock the Barcelona property market in 2023? That’s what Spain’s Independent Authority for Fiscal Responsibility (EIReF) thinks. They’re expecting the economy to shrink in Q4 2022 and Q1 of 2023.

But does that mean we’ll enter a seven-year slump in property prices, like what happened after the financial crash in 2008? The European Central Bank predicts property prices in the EU could fall by up to 9% in 2023 and 2024.

Against the odds, real estate experts have reasons to be optimistic about Barcelona.

Strong international demand, a thriving tech industry and supply shortages could balance out Barcelona property prices in 2023:

Something important to bear in mind if you live in a town and you are comparing how much it costs to buy a property in Spain because you are thinking of moving to one of the two Spanish capitals, but you still don’t know whether to live in Madrid or Barcelona.

Here are the 8 forecasts that will help you find out if 2023 is the year to buy, sell a flat in Barcelona or make real estate investments in Barcelona city.

1. Barcelona property transactions will fall in 2023

Spain is expected to close the year with 760,000 properties sold. It’s the highest figure since the real estate bubble of 2007.

But two main factors are likely to bring this figure down in 2023:

– The rise in interest rates will put buyers off taking out a mortgage

– The decline in the supply of new-build properties will continue as the cost of materials remains high

In the city of Barcelona, real estate transactions have already started to fall each quarter: from 4,089 in the first quarter to 3,880 in the third quarter: this applies to the cost of living in Barcelona, whether you are looking to move to uptown Barcelona, or to move to other parts of the city.

2. Mortgage interest rates will continue to rise

The European Central Bank raised interest rates for the first time in 11 years.

The jump from 0% in January to 2% by November is the largest leap in the ECB’s history. Most Spanish mortgage providers peg their interest rates to the Euribor (often 1% or 0.99% above the Euribor).

The Euribor itself has risen from -0.48% in January to 2.6% in October. A long period of ultra-low interest rates meant that 68% of all mortgages signed in Spain were fixed rather than variable in 2021. But this trend will reverse in 2023.

Mortgage rates have already risen to an average 2.71% for fixed mortgages and 2.09% for variable mortgages in August. Mortgage interest rates will remain high until inflation is under control and the ECB reduces its interest rates.

The immediate consequence will be increased defaults on variable rate mortgages in 2023. It’s estimated that 1.5 million families in Spain will become ‘highly indebted’ to banks as their mortgage payments exceed 40% of their monthly income.

An indirect consequence will be a reduction in demand for buying property.

3. Second-hand property prices will stabilise in 2023

House prices in Barcelona have been falling since September 2022, from an average of 4,121 euros per square metre to 4,076 euros in November 2022 (a good figure to bear in mind if you are looking to buy a property in Spain, specifically in the Catalan capital).

The drop in Barcelona property prices is consistent with a drop in the overall number of transactions. As mortgage interest rates rise along with inflation, it’s likely that anyone selling property in Q1 of 2023 will need to reduce their prices in order to sell.

But property experts in Spain aren’t expecting a sharp drop. It’s one of the major predictions for 2023 they all agree on:

– “The risk of a sudden correction in the property market is low, because the fundamentals are much stronger than in the previous downward cycle,” says Judit Montoriol, an economist at CaixaBank Research.

– “We’re expecting a moderation in demand and supply that slows the rise of property prices, without seeing them drop,” says Cristina Arias, director of market reports at Tinsa.

– “Prices will probably cool off, and take a stable course,” says Idealista’s spokesperson Francisco Iñareta.

– “The deceleration will be different to before. We’re expecting a short recession of low intensity,” says Félix Lores, an economist at BBVA Research.

– Property prices in recent months have had a moderate rise, so it doesn’t seem possible for a sudden drop in prices or a slow down of the property market.

The same situation can’t be said for the rest of Spain. Bankinter forecasts that residential property prices will fall by 3% in 2023 and another 2% in 2024. The hardest hit areas will be rural parts of Spain or those with a much lower demand than Barcelona.

4. New-build property prices will rise

If second-hand property prices in Barcelona fall steadily or stabilise in 2023, it’s predicted that new-build prices will continue to grow.

This has already been seen in 2022. While second-hand property prices fell -4% from Q1 to Q3, new-build property prices rose 5% to hit €5,319 per m2. New-build prices are much higher than the average property price of Barcelona which at the end of Q3 was €4,121 per m2.

A scarcity of new-build properties due to high costs of materials and inflation mean that this sector of Barcelona’s property market could have a better year than most.

5. The luxury property market will rise too

Prices in the most expensive districts of the Catalan capital have continued to rise at the end of this year: here are some of the most expensive houses in Barcelona that we manage from Bcn Advisors.

Housing prices in Les Corts have been rising month by month since August until reaching 5,023 euros per m2 in November 2022: remember that in this district, there is one of the most luxurious neighbourhoods in the city. A fact to bear in mind if you are thinking of living in Pedralbes.

It’s predicted that luxury properties will continue to sell throughout 2023. Factors include a preference for property in quieter areas with green areas since the COVID-19 pandemic.

The strength of the US dollar against the Euro is another factor pushing many American buyers to acquire luxury property in Spain. “For them, it’s like buying with a 20% discount”, says Francisco Nathurmal, founder and CEO of Bcn Advisors. “Such an opportunity for Americans to buy property in Barcelona may not last forever, so they should take it by an estate agency offering buyer’s agent services in Barcelona such as at Bcn Advisors, which can further help with the legalities of buying a property as well as the practicalities of securing a mortgage or transferring funds”.

6. The tech industry will lift Barcelona’s property market

As of October 2022, Spain has seen €13 billion in property investments this year. It’s 57% higher than in 2021 it looks like Spain will see a record €15 billion at the end of the year.

The sale of office space contributed €1.2 billion to the total, and just three transactions accounted for more than half of that investment. The largest sale, of the Castellana 51 building, took place in Madrid. But the sale of the Glovo HQ in Barcelona’s 22@ tech hub was one the big three sales, going for €220 million.

“Barcelona being a strong player in the technology sector should mean it should continue to attract the international market. A thriving tech hub means demand for office space, as well as residential properties to home workers”, says Francisco Nathurmal.

7. Foreign buyers will continue to choose Barcelona

Aside from being a European HQ of many global tech companies (e.g. Meta), Barcelona is also growing in its attractiveness to foreign buyers, with many inquiries coming to us asking for advice on buying a property in Spain as an American.

Spain’s property market will be bolstered in 2023 by workers and professionals choosing to relocate to either work remotely from Barcelona, or work for companies with a hub in Barcelona.

This is reflected in the growth of foreign buyers in the Barcelona property market. Foreign nationals made up 10.32% of all buyers in Barcelona in Q3 of 2022. This is up from 9.37% in 2019 before the COVID-19 pandemic.

8. Investors will choose Barcelona property as an inflation hedge

Property in Barcelona is expected to remain a favourable option for investors. Interest rates go up as inflation increases. Currently inflation is rising faster than interest rates meaning anyone who puts money in the bank loses. Real estate continues to be a relatively safe investment as it is more protected.

According to the Bank of Spain, the return on property investment hit 11.6% in Q2 of 2022. That was the month that inflation reached 10.2% in Spain. At the same time, government bonds were paying a 2.6% interest rate over 10 years.

Inmobiliaria Colonial, for example, have been buying office space in Barcelona and across Europe, with 99% occupancy rates despite a shift towards remote and hybrid work.

According to BNB Paribas Real Estate, residential real estate is giving investors a 3.5% annual yield.

“Investors – both international and local – could well seize Barcelona property as a long-term investment in 2023. While prices are expected to fall or stabilise at best, the slump is not predicted to last more than two years. After that time, the first months of 2023 could appear as a golden opportunity and the last chance to buy in before Barcelona property prices return to levels not seen since 2007/2008”, concludes Francisco Nathurmal.

Barcelona property market predicitions in 2023