As Spain continues its path to economic recovery, the country’s gateway cities have gained steam in real estate transactions, with Barcelona reporting the greatest increase in residential sales in the first two months of this year, according to a report published Tuesday.
Nationwide, the number of home sales rose 10% year-over-year during the first two months of 2017, according to Lucas Fox International Properties, a boutique brokerage focusing on Spain, citing latest data from the National Institute of Statistics.
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International buyers were the main drivers in the luxury segment, representing 65% of all Lucas Fox sales during 2016, according to the company’s year-end report published earlier this year.
Barcelona saw the biggest gain. The number of sales totaled 8,880 during January and February, representing a 23.3% increase from the same period last year, according to the National Institute of Statistics.
This market trend is further evidenced in quarterly data from Lucas Fox International Properties. In the first quarter of 2017, the brokerage saw a 57.7% increase in the number of closed sales in Barcelona, with a 61.5% increase in the total value of the transactions compared with the same period in 2016.
Lucas Fox International Properties didn’t provide concrete numbers of sales volumes and values.
Domestic buyers accounted for 29% of the brokerage’s Barcelona buyers in the first quarter, followed by the U.K. (25%) and Turkey (12%).
"The Turks see Spain as a safe haven for investment given the current political turmoil in Turkey. Meanwhile, following Brexit, a number of international clients who previously invested in the U.K. are investing in Spanish city homes in order to diversify their funds," Karen Storms, head of international sales at Lucas Fox, said in the report.
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Home prices in Barcelona averaged €4,123 per square meter (about US$ 350 per square foot) by the end of March, representing a 18.5% increase from a year ago. In the more prestigious, luxury districts of Les Corts and Sarrià-Sant Gervasi, home prices reached over €5,000 per square meter, (US$ 425 per square foot), according to Lucas Fox citing data from leading property portal Idealista.
In Madrid and Valencia, the total value of sales both more than doubled for Lucas Fox, with U.S. and U.K. buyers representing the two major foreign groups of buyers.
Looking ahead, Lucas Fox predicted the real estate market recovery will extend to the surrounding areas of the cities and other parts of Spain during the next 12 to 18 months. "With easier financing and continued low interest rates, we predict that the demand for homes will continue to rise," said Rod Jamieson, head of operations at Lucas Fox.
Spain’s residential properties have become more attractive as the European country shakes off the Great Recession triggered by the debt crisis in 2008. Last year, Spain’s economy grew 3.2%, becoming one of the strongest performers of the Eurozone’s four big economies, according to the International Monetary Fund’s data released at the beginning of this year.