New trends in Real Estate market
On this mail find attached here our Real Estate Market Report of 1st semester where we explain how the real estate behaved, always based in our data and operations. Now I would like to forecast the trends for the next months in Barcelona and its outskirts:
Rental prices stability
Since the beginning of this year we have very clear that prices, in a certain way, have reached the top. We have been saying it a long time ago; prices are related to salaries and when a family has to invest 40% of it in renting a property indicates that limit is reached. That happened in the end of 2017.
Rental resignations before contract expires grow
It is curious to see how, many times, media says that the most of tenants have important issues for rental renewals, but it is not like that in our company, and it doesn’t mean our clients are much different from others. We can assure that an important number of tenants resign before the expiring date, which are about 50% aprox. We have been very interested in knowing why clients resign before expiring date and we have discovered 2 basic reasons: because clients buy a property or they can’t assume the rental cost.
Sell trends slow down
It is true that this year we’ve been selling a lot, with a good rhythm; developers have raised prices and we keep selling the same. But this trend has changed in the last months. We sell well, slower though, but that is not a bad thing. We have always thought that encompass it with markets is a must. We can’t forget that sell prices are related to debt capacity through the mortgage and this capacity is leaded by salaries and, in our country, salaries only rose a bit.
Due to this behaviour, we are surprised of some market stakeholders’ answers when asked about scope for price increase answering that there is still room to reach prices of 2007! As it was the axiom! We understand prices will rise until potential buyers could not afford it, because we are sure that financial entities will be more careful tan before crisis.
Lot of owners and property investment funds interested in properties for rental purposes
Many years ago we haven’t seen so much interest in rental promotion, and that’s positive. The market is lack of rental properties. We are still far from European Standard. Every time it is announced that a new company is coming to set its HQ in Barcelona – mainly of the Technology field- which means to settle many workers from abroad, we ask ourselves: where are they going to live?
There’s a need of quicker public policies than since now and, most of all, it is necessary to facilitate private investments in rental market with guarantees and juridical security. We must change the vision of private funds as simply speculators and seeing them as possible partners.
We would see right there would be tax benefits for owners who make a rental contract for more than 5 or 10 years, etc. Surely with this type of contract we would solve the problem that no one talks about: the problem of the owners of flats, with pensions and increasingly smaller incomes, to which selling their property and renting would be a very good option. They only need to have the opportunity of long-term contracts, which does not force them to fear for the future.
As usual, approaching the local elections, making works and inaugurations is a non-stop. This trend is historical but it keeps surprising us.
Immaculada Amat
Amat Immobiliaris Chairwoman
