Property goes sky high
A few years back I thought property prices were reaching their peak when any 100 square metre flat was priced at 240,000 euros + (or 40 million pesetas going back to the pre-euro scale).Interest rates have remained low and the demand for flats seems to be as strong as ever, with prices in Barcelona and Madrid continuing to show double digit increases in the last few years.
Passeig de Gracia, Barcelona's most fashionable boulevard, has seen prices per square metre rise to over 8,000 euros - That's right, you can expect to pay 1 million euros for a renovated 100 square metre apartment on this street. What's more, the trend of converting offices on this street to luxury apartments is well underway, with several buildings changing hands and the number of people seeking to live in the city centre increasing.
But what's happening in other segments of the market?
On Sunday we stopped in at the sales office of a renovated building on Career Carders, just off Plaza Sant August Vell. This is the old city, a short walk from the fashionable Borne area, where immigrants mix with young professionals who have moved into the area. Work has been going on at this site for some time - 3 years the developers told us, and I was curious to know what the asking price for a renovated flat in this block would be.
On entering we were informed that all the units had just one bedroom. Of the 25 flats that were originally on the market three weeks earlier only 4 remained, one looking onto Career Carders itself and the others in an adjoining building that looked onto a small street behind this one. Alot of care had gone into renovating the building and conserving its historical character - with beautiful stone arches and a palm tree gracing the interior courtyard. That said, all the flats had been designed for a specific market - one bedroom, studio style living, ranging in size from some 40 square metres to around 60 square metres at the most. To my amazement, prices were coming in at around 6000 euros per square metre - that is 250,000 to 300,000 + for a small one bedroomed flat in a fairly dodgy street.
So what does this tell us about the Barcelona property market? Demand is strong, areas in the old part of the city are in a process of rapid transition and there is plenty of money around. The popularity of one bedroomed places and semi-loft style living seems to reflect a belief that many people are no longer interested in the conventional three bedroomed flat. It's also true that as prices have increased it has feasible to renovate old apartment buildings and sell them off at a profit.
There's also demand from overseas buyers, as an article in the Times noted earlier on this year.
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