Residenal Real Estate values from the perspecve of the potenal buyers in terms of sale in Barcelona

Student: Samaneh Pourian Supervisor: Rolando Biere Arenas Master in Urban and Architectonic Management and Valuaons 01 Jun 2018 Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

Background

From 2008, the real state bubble burst during the global economic crisis, generang a slowdown in the Spanish economy, prevenng many borrowers from paying back their property loans. Prices collapsed and only started rising again in 2014 when the Spanish recession ended. Currently this situaon has been increasing, generang problems to the families that needs acquire a dwelling.

Parcularly in Barcelona, since 2005, saw sales prices reach a peak midway through, followed by a decline unl early 2013. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Specific situaon of the last years in Barcelona

In the city districts of the Ciutat Vella (Old Town), Sarria-Sant Gervasi and Eixample,average asking price has seen the greatest rebound, as can be observed in the final quarter of 2012. With limited new construcon in the Old Town and

Eixample, asking prices for good quality properes are beginning to strengthen. Registered home purchases and sales. Year 2017

1. Purchase, surface and prices of new and used homes by districts

Purchase and Sale Average area (m2 built) Total price (thousands of euros) Price € / m2 built New Free New Free Free Free Protected Used new housin Protected Used new housin Used new housin Used Districts Total new housing housing housing Total g housing housing Total g housing Total g housing

BARCELONA 15.676 1.082 83 14.511 80,8 92,6 70,5 80,0 334,2 377,7 329,6 3.745,9 4.048,3 3.714,2

1. Ciutat Vella 1.620 85 - 1.535 68,6 88,0 - 67,5 310,9 536,5 295,3 4.236,9 5.193,4 4.170,9 2. Eixample 1.688 115 15 1.558 89,7 87,4 78,7 90,0 415,0 427,7 413,6 4.333,4 4.825,7 4.280,6 3. Sants-Montjuïc 1.754 138 11 1.605 70,8 75,5 70,0 70,4 260,8 298,6 250,4 3.465,6 3.967,5 3.327,5 4. Les Corts 820 70 35 715 90,9 92,4 63,7 92,2 500,4 656,4 475,9 4.750,4 7.169,8 4.369,6 5. Sarrià-Sant Gervasi 1.369 136 2 1.231 118,2 122,3 81,0 117,9 600,6 531,1 607,9 5.061,7 4.515,4 5.119,2 6. Gràcia 1.112 73 3 1.036 86,1 94,8 83,0 85,5 370,6 359,5 371,3 4.076,5 3.858,6 4.090,8 7. Horta-Guinardó 1.815 190 7 1.618 73,1 74,3 69,5 72,9 198,7 187,8 200,4 2.696,6 2.605,0 2.711,5 8. Nou Barris 1.153 8 2 1.143 63,2 60,0 65,0 63,2 140,1 157,9 139,7 2.121,6 2.583,4 2.112,9 9. Sant Andreu 1.700 20 - 1.680 73,7 68,3 - 73,8 216,1 230,6 215,9 2.829,8 3.747,9 2.814,4 10. Sant Martí 2.528 243 8 2.277 81,7 107,2 81,1 78,9 312,3 361,3 305,6 3.619,8 3.439,8 3.644,4 NC 117 4 0 113 ------

Department of Statistics. City Hall of Barcelona. Source: Association of Registrars of Property, Furniture and Commercial Property of Spain. Data published on the website of the Department of Territory and Sustainability of the Generalitat de Catalunya. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Evoluon of the prices and monthly salaries

Wages in Spain increased to 2020.14 EUR/Month in the fourth quarter of 2017 from 1809.12 EUR/Month in the third quarter of 2017. It averaged 1715.60 EUR/Month from 2000 unl 2017, reaching an all me high of 2026.14 EUR/Month in the fourth quarter of 2015 and a record low of 1264.36 EUR/Month in the first quarter of 2000. [Trading economics] . Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Evoluon of the mortgages

For most people there are many reasons for financing at least a part of a property purchase, especially given the current low interest rates . Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

Objecves

How to valuate residenal real estate from the perspecve of the potenal buyers experience and how to make that a scienfic approach, not by emoons but all about to understand tenant’s experience value.

TO STUDY HOW THE RESIDENTIAL SALES PRICES HAVE EFFECTED ON FAMILIES ACCORDING TO THEIR INCOME SINCE 2008 TO THE PRESENT TIME.

Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Specific Objecves

o Determine what has been the evoluon of residenal prices o Generate a general framework that illustrates the situaon of the crisis in Barcelona. o Explain the situaon about residenal prices since the perspecve of the potenal buyers. o To enhance, which neighborhoods have had a more marked impact and which type of housing and selling price have seen their inial price decrease further. o Knowing Spanish economic law in relaon to salaries and house purchase. o Appraise and show how much me people need for buying an ideal home, according to family income? o Define the needs and aspiraons of the families that are interested in purchase a property. o And study how the potenal buyers idenfy, understand or see the problem Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

Theorecal Framework

In Barcelona, before a potenal client buy or sell a property, you need to know what is going on into the market. Without good informaon, from a source you can trust, you are flying blind and just asking to be taken advantage of. So needs to arm themselves with knowledge and informaon before you put their hard-earned cash on the line. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

o Ability of people in purchasing a property in general, according their monthly salary, regarding price history and economic situaon. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

o Spaniards living abroad and non-resident expats will pay higher interest rates than they would if they were resident here. A fixed-rate mortgage, the usual opon in this case, “is around 2.5% for 20 years,” . Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

State of the Art 5. Compraventas de vivienda registradas. Año 2017 o 2. Compraventas,Current situaon of registered housing sales in Barcelona city (2017) superficie y precios de las viviendas nuevas y usadas por barrios Purchase and Sale Average area (m2 built) Total price (thousands of euros) Price € / m2 built New New Free Protected Used Free Protected Used Free Used Free Used Districts Neigborhoods Total new housing housing housing Total new housing housing housing Total new housing housing Total new housing housing

BARCELONA 15.676 1.082 83 14.511 80,8 92,6 70,5 80,0 334,2 377,7 329,6 3.745,9 4.048,3 3.714,2

1 1. el Raval 712 3 - 709 62,1 80,5 - 62,0 240,3 292,5 240,0 3.469,9 3.633,1 3.468,9 1 2. el Barri Gòtic 304 39 - 265 99,3 121,9 - 96,0 472,7 799,5 424,0 4.565,8 5.397,4 4.441,9 1 3. la Barceloneta 209 19 - 190 44,7 46,6 - 44,5 197,7 192,8 198,2 4.501,1 3.967,5 4.551,3 Ciutat'Vella 1 4. Sant Pere, Santa Caterina i la Ribera 395 24 - 371 68,1 62,6 - 68,4 314,3 375,8 310,4 4.593,7 5.973,2 4.506,9 2 5. el Fort Pienc 324 33 1 290 86,8 99,1 88,0 85,3 400,4 507,5 383,2 4.296,6 4.787,3 4.217,6 2 6. la Sagrada Família 80 - - 80 74,0 - - 74,0 255,8 - 255,8 3.494,5 - 3.494,5 2 7. la Dreta de l'Eixample 512 24 12 476 104,6 81,7 78,4 106,6 519,8 257,7 535,3 4.628,0 2.878,1 4.731,0 2 8. l'Antiga Esquerra de l'Eixample 317 19 1 297 87,3 95,4 - 86,7 372,2 478,7 363,4 4.218,9 4.704,4 4.178,8 2 9. la Nova Esquerra de l'Eixample 227 39 1 187 78,6 76,4 73,0 79,2 339,6 431,9 310,2 4.519,0 6.053,1 4.030,3 Eixample 2 10. Sant Antoni 228 - - 228 79,0 - - 79,0 297,9 - 297,9 3.322,7 - 3.322,7 3 11. el Poble Sec - AEI Parc Montjuïc 423 4 - 419 62,6 74,8 - 62,4 260,5 307,0 258,0 3.554,6 4.105,7 3.524,8 3 14. la Font de la Guatlla 74 - - 74 84,0 - - 84,0 235,1 - 235,1 3.056,9 - 3.056,9 3 15. Hostafrancs 131 2 - 129 73,5 77,0 - 73,5 263,3 - 263,0 3.276,3 - 3.270,9 3 16. la Bordeta 247 122 - 125 73,6 76,1 - 70,8 288,1 300,4 222,9 3.803,9 3.962,8 2.958,9 Sants5 3 17. Sants - Badal 227 5 - 222 72,5 70,8 - 72,6 251,5 323,5 245,3 2.911,1 4.425,1 2.782,2 Montjuïc 3 18. Sants 354 5 - 349 69,6 65,4 - 69,7 338,3 230,0 344,4 4.683,4 3.635,4 4.743,0 4 19. les Corts 590 68 35 487 81,2 93,4 63,7 80,9 417,3 669,8 357,2 4.737,6 7.252,9 4.138,7 4 20. la Maternitat i Sant Ramon 119 2 - 117 83,0 60,5 - 83,5 369,9 - 374,0 4.018,5 - 3.995,1 Les'Corts 4 21. Pedralbes 111 - - 111 157,2 - - 157,2 890,0 - 890,0 5.290,3 - 5.290,3 5 22. Vallvidrera, el Tibidabo i les Planes 49 - - 49 154,4 - - 154,4 391,3 - 391,3 2.887,9 - 2.887,9 5 23. Sarrià 203 2 - 201 110,0 148,5 - 109,5 690,1 - 690,2 6.159,2 - 6.177,7 5 24. les Tres Torres 107 7 - 100 146,3 132,0 - 147,2 805,7 634,8 816,1 5.649,1 5.001,9 5.688,5 5 25. Sant Gervasi - la Bonanova 301 42 - 259 122,1 105,5 - 124,5 612,3 474,7 632,9 5.003,2 4.481,2 5.081,1 Sarriá5Sant' 5 26. Sant Gervasi - Galvany 323 46 1 276 118,1 134,5 89,0 115,4 583,6 593,3 581,7 4.787,6 4.736,0 4.797,6 Gervasi 5 27. el Putxet i el Farró 386 39 1 346 107,9 121,3 73,0 107,0 523,2 467,5 527,7 4.839,6 4.040,2 4.903,1 6 28. Vallcarca i els Penitents 171 35 3 133 94,4 98,8 83,0 93,6 337,2 350,7 334,0 3.597,2 3.735,1 3.564,8 6 29. el Coll 59 12 - 47 74,1 80,9 - 72,2 205,8 228,7 199,3 2.741,6 2.817,5 2.720,0 6 30. la Salut 161 3 - 158 85,4 67,5 - 85,7 310,9 225,0 312,3 3.853,7 3.337,4 3.862,0 6 31. la Vila de Gràcia 422 19 - 403 85,2 97,7 - 84,6 432,2 483,2 429,8 4.570,6 4.945,8 4.552,9 Gràcia 6 32. el Camp d'en Grassot i Gràcia Nova 299 4 - 295 85,5 149,0 - 85,2 362,5 335,0 362,6 4.005,0 2.248,2 4.011,9 7 33. el Baix Guinardó 411 14 - 397 72,3 95,2 - 71,4 272,5 385,6 265,1 3.552,0 4.065,2 3.518,3 7 35. el Guinardó 388 1 - 387 73,7 86,0 - 73,7 202,2 - 201,8 2.742,6 - 2.740,0 7 37. el Carmel 344 69 2 273 66,5 60,4 74,0 68,0 144,6 135,7 146,9 2.147,3 2.246,4 2.120,8 7 41. la Vall d'Hebron 25 7 - 18 59,8 52,9 - 62,6 210,4 175,0 224,9 3.615,3 3.384,0 3.710,5 Horta5 7 42. la Clota 2 1 - 1 265,0 467,0 - 63,0 ------Guinardó 7 43. Horta 259 47 1 211 73,5 77,0 67,0 72,8 192,9 205,4 189,6 2.602,4 2.713,5 2.573,5 8 45. Porta 185 - - 185 67,9 - - 67,9 171,0 - 171,0 2.478,1 - 2.478,1 8 46. el Turó de la Peira 93 4 - 89 61,3 54,0 - 61,6 107,8 91,8 112,1 1.756,9 1.688,2 1.775,2 8 47. Can Peguera 10 - - 10 63,1 - - 63,1 114,4 - 114,4 1.713,6 - 1.713,6 8 48. la Guineueta 83 1 - 82 71,5 87,0 - 71,2 175,0 - 172,7 2.261,7 - 2.245,0 8 52. la Prosperitat 164 - - 164 59,3 - - 59,3 132,0 - 132,0 2.020,1 - 2.020,1 Nou'Barris 8 54. Torre Baró 9 - - 9 77,6 - - 77,6 97,0 - 97,0 1.380,5 - 1.380,5 9 57. la Trinitat Vella 237 - - 237 68,8 - - 68,8 142,3 - 142,3 2.057,9 - 2.057,9 9 59. el Bon Pastor 118 6 - 112 72,0 82,5 - 71,4 144,4 106,0 147,1 1.893,7 1.289,0 1.936,4 9 60. Sant Andreu 565 1 - 564 75,2 55,0 - 75,3 212,0 - 212,1 2.781,2 - 2.781,9 9 61. la Sagrera 340 - - 340 69,4 - - 69,4 231,6 - 231,6 3.303,8 - 3.303,8 9 62. el Congrés i els Indians 173 3 - 170 70,9 70,3 - 70,9 189,5 316,0 186,9 2.709,5 4.443,3 2.672,9 Sant'Andreu 9 63. Navas 250 10 - 240 83,6 60,5 - 84,7 350,3 289,4 354,2 3.947,2 5.144,0 3.871,5 10 65. el Clot 709 124 2 583 95,8 137,5 101,5 86,0 348,2 441,3 322,9 3.605,9 3.305,0 3.687,5 10 67. la Vila Olímpica del Poblenou 35 - - 35 114,6 - - 114,6 492,1 - 492,1 4.315,3 - 4.315,3 10 68. el Poblenou 159 24 - 135 77,8 76,5 - 78,0 337,9 372,2 332,8 4.347,4 4.760,8 4.285,7 10 69. Diagonal Mar i el Front Marítim del Poblenou 64 3 - 61 92,8 79,0 - 93,0 672,5 250,0 680,2 6.951,3 3.164,6 7.020,2 10 70. el Besòs i el Maresme 367 32 2 333 69,0 68,3 82,0 69,0 215,9 167,2 221,8 2.910,9 2.581,1 2.951,0 10 73. la Verneda i la Pau 326 18 - 308 70,6 56,3 - 71,4 138,3 134,2 138,8 2.065,7 2.417,2 2.026,4 NC NC 117 4 0 113 ------

Departament d'Estadística. Ajuntament de Barcelona. Font: Colegio de Registradores de la Propiedad, Bienes Muebles y Mercantiles de España. Dades publicades al web del Departament de Territori i Sostenibilitat de la Generalitat de Catalunya. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Economic situaon of families of Barcelona

o Buyers take advantage of uncertainty aer Catalonia referendum sparks falls. o "Buyers in Eixample are more discreonary than elsewhere in the city and much more sensive to the polics, who notes that many shied their sights to alternave Spanish cies - notably Madrid and Valancia - as well as neighboring Portugal, in the final months of 2017. The number of offers is almost the same as equivalent period last year, but there are fewer sales. People are offering lower than asking prices and not all sellers are recepve”. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Family income in Barcelona by neighborhood

Revenue rose by an average of 650 euros gross per capita to reach 20,757 on average. Pedralbes remains the richest neighborhood and Ciutat Meridiana as the poorest in the city.

The gross family income available per capita in Barcelona grew by 3.1% in 2016 , about 650 euros, to reach 20,757 euros.

Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Effecve housing demand

Changes in household sizes and layout, as well as increased life expectancy are just a few of the factors that are impacng home purchase decisions. The supply of new-build homes is adjusng to requirements of current trends; a good indicator of this is the increase in the average size of new housing being built.

Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

Methodology

The research work will be divided in two clear parts;

• The first of THEORY: This one, basically qualitave will be based on literature review. It's pretends to develop Theorecal Framework about evoluon of Real Estate market of sale prices, State of the Art of the current situaon and clarificaon of the real situaon of sales prices in Barcelona and the handicap that implies in acquire dwellings for the families.

• The second EMPIRIC: This is basically quantave. It is developed to know the real percepons of the potenal buyers that want to acquire a dwelling. For develop this will be used a specific survey.

o Meeng people and creang a system by making a chart to give values can divide elements and in the elements of each property what is the relaonship between the let´s say psychological value to real value! Each of these elements how much value adds in the market? Depends on What! Locaon, street, or even somemes a name gives value!! (exp. Passeig de Sant joan).

o What is interesng is that in some case in average, a property in terms of price in me will be high, why? Because of having a doorman, or? And these are not what I am going to say, it´s what I´m going to study about, maybe they are wrong by people but are the criteria, then I must go for how to establish these criteria.

o “Client Survey”, It shows how one property has value for each customer, in terms of locaon, building, elevator, distribuon, and etc. . Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

• Example of the Survey

Geng the real informaon and perspecve of potenal buyers visited properes. Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona

PRELIMINARY BIBLIOGRAPHY

• Idealista, Idealista Price reports, Evoluon of sales prices, Historical Excel, 2018, Available at < hps://goo.gl/BghEJt > • TINSA, Global property guide, Spanish housing market is now healthy, March 2018. Available at:< hps://goo.gl/x29vD2 > • LUCAS FOX, Property trends in Spain, Barcelona sales trends, 2005-2015, page 09. Available at < hps://goo.gl/NGBhUz > • TRADING ECONOMICS, SPAIN average nominal monthly wage, 2000-2018. Aveilable at< hps://goo.gl/AfUcXm > • Rod Jamieson, Lucas Fox, Mortgages in Spain, Compeve mortgage packages to suit all requirements. Available at < hps://goo.gl/kqMGtJ > • BBVA, Spain Real Estate Outlook, Financing costs remain at historically low levels, March 2017, Page 13-14. Available at < hps://goo.gl/Dmthhq > • Hugo Cox, April 6, 2018, Financial Times, Lowballers hunt bargains in Barcelona’s faltering property market, April 6, 2018. Available at < hps://goo.gl/rNY4gw > • CBRE, Key features of the market and residenal sector in Spain, effercve demand profile, page 16, Jun 2017, available at < hps://goo.gl/iDjJCR > • El País, If you are not a resident in Spain, What are your mortgages opons, 31 July 2017, Available at < hps://goo.gl/MBJ4EH > • Numbeo, Cost of living in Barcelona, May 2018, Available at < hps://goo.gl/PA5phB > • Ingrid, SH Barcelona, What are the salaries like in Barcelona, 2017, available at < hps://goo.gl/aWgTor > • Eimear Corriga, Metropolitan Barcelona, Spain housing crisi, Otober 2016, Available at: hps://goo.gl/4zZkDZ > • Mark Stücklin, Spanish property insight, Catalan constuonal crisis, January 2018, Available at < hps://goo.gl/88Y52A > • Casamona, Casamona internaonal real estate, Housing prices get cloder to it’s limits in Barcelona, April 2017, available at < hps://goo.gl/pRhnEm > • The Local, Spanish property market, February 2018, Available at < hps://goo.gl/M43WTz > • Spanish Property insight, The Local es, Why now is the right me to buy a property in Spain, February 2017, Available at < hps://goo.gl/FGRKVx > • Department of Infographics, El periodico, Family income in Barcelona by neighborhood, 2016, available at < hps://goo.gl/7Upz6B > Residential real estate values from the perspective of the potential buyers in terms of sale in Barcelona