Investing in Barcelona: Key Insights for Smart Property Buyers

Are you looking for a place to invest in Barcelona? In this article we'll talk you through the main things you need to know before putting your money into this market.

Both property values and rental prices in Barcelona have increased significantly since 2014, and Barcelona's real estate market has returned to being one of the most dynamic in Spain, after a decline during the worst period of the Covid-19 pandemic. So read on, because in this post you will find information on whether it is a good time to buy property in Spain (especially if you are a foreigner), the forecast for the Barcelona property market in 2023, and all of this applies whether you want to buy property in Spain as an American, or simply want to make a property investment in Barcelona for professional reasons.

Why invest in Barcelona?

The next few years will be difficult for all real estate markets due to the cost of living crisis in Barcelona and the war in Ukraine, but despite this, investing in a market with a proven track record can be a smart decision, all things considered. In case you are looking for the best real estate agency in Barcelona to advise and inform you about everything, let's first briefly summarize in 8 tips what you need to know:

Competitive mortgage rates: Compared to the last 20 years, mortgage rates are extremely competitive, which means that if you lock in your rate now, you will know exactly how much you will pay over the next few years and you will pay the same amount each month. This allows you to plan for the future and gives you a sense of security. With a mortgage, you often end up paying much less per month than you would if you rented the same property and, although there is a down payment (typically around 20%), it is not just a house, but also an investment, especially if you decide to make improvements to your home over time.

Satisfactory rental yields: Barcelona has experienced a high demand for rental properties, especially in recent times with the return of business travel and the influx of foreign students and workers (specifically that profile of foreigners who want to live in Barcelona as expats), which has led to price increases in the rental market and improved profit margins for investors.

The price of rent per square metre per month in Barcelona averages 21.80 euros, making the Catalan city the most expensive place to rent in Spain, according to The Living Property Telescope 2022. According to valuation platform Tinsa, the districts offering the best rental yields are Nou Barris (4.7%), Ciutat Vella (4.5%), Horta Guinardó (4.4%), Eixample (4.3%), Sant Andreu (4.1%) and Sant Martí (4.1%). The average rent in Barcelona is around 1,200 euros, but rises significantly in central locations and new constructions. New legislation for 2023 has prevented landlords from increasing existing rents by more than 2% for contracts due for renewal between April and May.

Strategic location with unrivalled quality of life: Sometimes referred to as Europe's premier "urban resort", Barcelona ticks all the boxes, both geographically and climatically. The Catalan capital is nestled between the mountains and the Mediterranean Sea, with very little land to expand. Building upwards is fraught with restrictions, which means that property in Barcelona will always be expensive, given the scarcity of what may be logistically available and which, in the long term, should increase in value. If you are more interested, contact our luxury real estate Barcelona, Envy Realty.

In short, investing in Barcelona can be a wise decision, but it is important to be well informed.