ATYPICAL YEAR. Every year we make a Market Report where we try to assess the previous year explaining with our data what has been our market reality. In this early 2021 we want to analyze the 2020, an atypical year in many ways for reasons we all know. Because of the circumstances occurred it is very difficult to compare and point out trends, these are the reason why we have decide not to do some of the analysis that we habitually do since with the mandatory lock down and restrictions of 2020 they do not make sense. As we said, pointing out is not easy either, we foresee a 2021 with a lot of uncertainty and with a very changing environment, which will surely condition the evolution of the real estate market. Analyze if 2020 has been good or bad year, it depends on the point of view and from where we put the scale. From the point of view of the rental market data, we have slightly exceeded 2019 and in the real estate sales market, we have clearly stayed below. In the following pages, we try to focus in each case and make our assessment of the moment. What we can explain is how we have lived this 2020. It is clear that during the long lock down, which began in mid-March, we suffered a lot; we try to manage it in the best possible way in an environment of total uncertainty and we make complicated decisions. However, at the end of the lock down, we gradually reactivated and, with more or less success, we have had opportunities and a market where to work. This situation contrasts with financial crisis of 2008, which we still have in mind, where we were at the center of the crisis, and the market dropped to a minimum. This is why we have an ambivalent feeling, there is a crisis but in our market we continue working. That is the reason we cannot shut off from what is going on and seeing how other business sectors are suffering; it is difficult to imagine how you can manage your business without having income in a year.
MARKET REPORT
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Guifré Homedes Amat Managing Director
0 2 20
RENT This 2020 the rental market has been characterized by two decisive events, on the one hand, all the consequences derived from COVID and on the other hand the changes in the legal frameworks. COVID brought us a lock down of practically 3 months of non-market; in addition, the lack of tourism in Barcelona city has brought changes in the rental offer; at least in the published offer. In addition, with the changes in the legal framework, we had a few more weeks of non-market because we had to withdraw the entire product from the market while we were adapting to the new regulation. In summary, in twelve months, we have only had eight and a half months to work of the whole year.
RENT - Contracts and Prices Amat Immobiliaris Data As we have said, for us 2020 has been a good year of activity, we have made 2% more new contracts compared to 2019, which was already a year of growth. We have to say that the activity has been concentrated in a few months being June and July the two most intense (postconfinement effect).
Rental contracts
Renewals
Contract
Total
during the alarm state a royal decree was approved about to make automatic extensions of contracts that ended in a set period (and thus were extended several times). Many tenants and owners, faced with the uncertainty of the moment, accepted this option. If we talk about the evolution of rental prices, it is evident that there is a decisive fact, the approval of the Rent Regulation Decree on September 23rd. In fact, rents were already falling in all our offices before the publication of the Decree. At this moment is premature to calibrate the effects it has had on the real market, but some considerations we can do: Except for specific cases, when rents were recalculated after the approval of the Decree, the differences were generally small (obviously downward). The Reference Index is a tool that used to work well but it has been forced to introduce areas and properties that have ended up distorting the results of the tool itself. For example: areas where there is not enough critical mass of contracts and it gives inconsistent results, products not considered such as houses, characteristics not well considered such as terraces, etc. As the regulation has been done back to the professionals and without knowledge of the reality, there have been legal gaps not contemplated that allow different interpretations. Some have been tried to fix on the progress. The consequence is that there are many different types of contracts and clauses coexisting in parallel. Some owners have decided to sell their properties. This may not be the main reason, but it is the trigger. Once the properties are sold, these never return to the rental market.
Rental new leases 2019
+2%
2020
And, finally, we could be in a scenario in which all the owners, logically, go to maximums of what the regulation allows and the market is below. As a final summary, today we are further away from solving the real problem of access to rental housing than we were before September 23th. It might seem they have improved access, but as a structural solution for future generations, we have regressed.
Rental price impact
-21%
BCN
St Cugat
€/sqm/month
St Just
14,54 13,15 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
12,46
DEC
The contracts renewals that expired in 2020 have decreased more than we thought. We are in years where there are many contract expirations, as a result of the 3-year contracts that the LAU contemplated before 2019. The reason for not having reached the foresight is because
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
MARKET REPORT
The recovery and growth of new contracts has been led by our Sant Just Desvern office where we have had the opportunity to continue marketing different new development projects focused on rent.
The investment stop or goes away. Regulation may not be the only cause, but it is part of the constant changes in the rental legal framework that make it impossible to establish a stable framework.
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Rent repercussion price in Barcelona HORTA GUINARDÓ
SARRIÀ ST. GERVASI
8,47
GRÀCIA
13,58 13,17 LES CORTS
ST. ANDREU
15,77 L’HOSPITALET
EIXAMPLE
15,31
SANTS MONTJUÏC
14,05
NOU BARRIS
9,63
16,23 ST. MARTÍ
BADALONA
11,81
CIUTAT VELLA
14,13
14,64
Data in €/sqm/month
As we already said in the reports published in 2020, we have noticed that the rented properties were in higher price ranges, and this is due to several factors. On the one hand, the synergies with other company departments have given us many development rental properties, which in most cases meet the most demanded characteristics:
terraces, electricity and community services (swimming pool, etc.). In the other hand having rented more houses, especially in the surroundings of the city, with the previous characteristics (electricity, private garden, swimming pool, etc). Globally, more than 60% of the new contracts made have been above € 1,000 in rent.
Average rental price by housing typology
% Rental contracts by segment of price
Flat
Barcelona
Flat
House
Sant Cugat
Flat
House
Sant Just 45%
4000
2013
2014
2015
2016
2017
2018
2019
2020
40% 35%
3000
30% 25% 2000 20% 15% 1000
10% 5%
0
€/month
0
MARKET REPORT
< - 600
4
601 -800 801 -1.000 1.001 -1.500 1.501 - 2.500
2.501 - > €/month
RENT - Offer Amat Immobiliaris Data In recent months, a lot has been written in the media about how the published offer had grown significantly in the city of Barcelona during 2020. This reasoning has been linked to the lack of tourism due to COVID that has caused tourism rental properties enter into the rental market (in many cases mixing concepts such as longterm rental -LAU- and seasonal rental). Without contradicting these data, our experience has been different. Of our portfolio of clients who have rental properties with both models, tourist and long-
term, only a very small number have decided to take this step and allocate tourist properties for long-term rental. For different reasons most still prefer to wait for the recovery of tourism. We have had an average scenario with 10-20% offer higher than in 2018 and 2019. We see that the largest increase offer happen in the city of Barcelona, on the other hand, in its surroundings we are at similar levels or, in some cases, lower. We believe this situation to be the case for different reasons:
In 2020, we have rented more outside than inside the city. With the post-lock down, there has been a movement out of the city looking for properties with the characteristics mentioned above.
Rental offer evolution
The disappearance of part of the city’s demand (foreign because it has not come and local because they have searched outside) and an environment with more generalized offer, we have taken longer to rent a property in Barcelona. Increase in resignations, which means tenants who leave the property before the end of the contract. Obviously, this generates offer. 2013
RENT - Property Typology Amat Immobiliaris Data Normally we analyze the movements we have in rental properties, this 2020 this data does not have sense due to the market interruptions that we have had throughout the year. It will be interesting during 2021, if we do not have interruptions, to see how, probably in some areas, the time needed to rent real estate is lengthened.
2014
2015
2016
2017
2018
2019
2020
In 2020 the rental contracts were for 90sqm floor, with 3 bedrooms and with an energy label E (second hand) or B (new construction) properties. The green environment of the rented offer (GreenDEX) was mainly found between the G-3 and G-4. Additionally, one of the most search characteristics by the plaintiffs has been properties with a private terrace or garden. The offer that had these characteristics was clearly the one that was best rented.
rented housing by typology 35%
12,5 % 24 % 95-120 sqm
43 % 20,5 %
Number of bedrooms Requested
65-95 sqm
27% 20%
18% >120 sqm
< 65 sqm
energy certificate
requested SURFICES
RENT - Tenant Typology Amat Immobiliaris Data As we have discussed previously, since June there has a significant interest in looking for properties outside of the city. In our case, when we say ‘outside the city’ we talk about areas of Sant Cugat del Vallès and Sant Just Desvern and its surroundings. It is a phenomenon that has happened cyclically, and that is closely linked to the life cycle of families. This time, it has intensified and has been directly related to the lock down that we experienced between March and May. Historically it was also linked to the sale, but this time it has also been visualized in the rental. Age groups have distributed it under 50 years old. As we said before, we have rented a more “Premium” properties, which obviously fits more with the average economic potential of the group of tenants between 40 and 50 years old.
6% 23,5 % 4,5 % 11 % 37 % 6,5 % 11,5 %
5,5 % 17,5 % 29 % 29 % 19 % greenDEX
age profile
32%
15%
40-50 years
24%
30-40 years
MARKET REPORT
or more
1 2 3 4
50-60 years
5
8%
>60 years
21%
<30 years
SALE
the price to position themselves. The second factor to highlight is that at the time of negotiation, offers are made and, above all, offers are heard if, as we said, you really want to sell.
Globally, we have generated less sales than in 2019, specifically 18% less. However, as we will explain later, we have moved in significantly higher price ranges than in 2019, in volume the difference is 6%. It is evident that there are many reasons why this 2020 there have been fewer sales operations; in most cases it have been for some reason related to COVID, but in our case also because the new development projects that we commercialize were in very mature phases or already sold waiting to hand over. SALES turnover volume
BCN
St Cugat
St Just
The repercussions observed in our case have been similar or lower than in 2019. In many cases, we do not read it as a price drop; when you sell property significantly bigger the absolute value is high, but the repercussions for sqm built down. In Barcelona city, the sales have focused on a range between 3,100 and 4,300 €/sqm built, and particularly in the 3,600 €/sqm built. The distribution by the different districts of the city where we have sold has been very homogeneous in this value, without any to highlight. The highest sale has been for 6,100 €/sqm built in the Diagonal Mar neighborhood.
Total
In Sant Cugat, the average impact price has been 3,500 €/sqm built. As has been said before, this value is lower than that 2019 and is highly conditioned because many houses have been sold, with high built surfaces, with which the repercussions have been lower. The maximum impact has been in Sant Cugat Center of 6,400 €/sqm (higher than in 2019). 2012
2013
2014
2015
2016
2017
2018
2019
2020
In Sant Just Desvern, although we have had a similar effect to Sant Cugat related to the sale of more houses, the average impact sold has grown, and from 3,160 €/ sqm in 2019 we have gone to 3,600 €/sqm in 2020. The maximum has been a similar value of 2019, at about 5,400 €/sqm built.
SALE - Second hand Amat Immobiliaris Data In second hand, we have done 3% more operations than in 2019 and, above all, we have done them in higher price ranges; operations above € 500,000 have grown by 10% compared to 2019. For this reason, the difference in the volume of sales generated has been much lower than in the number of operations.
In the surroundings of Sant Just Desvern the values have been the following ones: in Sant Joan Despí about 2,500 €/sqm built, in Sant Feliu de Llobregat about 3,100 €/ sqm and in Esplugues de Llobregat about 3,600 €/sqm. In all cases, they are specific areas of each city, those that border Sant Just Desvern, and it can’t be extrapolated to the entire population.
In all our offices, the sales average has been above € 400,000. Sant Cugat del Vallès, as it happened in 2019, has been above € 600,000. This is because for us it is a compact market talking about product and price, and usually, the offer is concentrated in very specific price ranges.
Finally, always point out that the sale prices of each year are directly related to the offer and sales of each area. In other words, not all the market has behaved in the same way.
MARKET REPORT
There is many rumors about whether prices are going down or how much they will go down, but we have not really noticed any change. Two factors have to be considered: the first are the ones who do not really want to sell, or don’t need it, have withdrawn the property from the market, and the ones who want to sell have adjusted
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In the following infographics, it is very clear how the house market has become very important in 2020. The percentages of properties with surfaces above 180sqm and with more than 4 rooms have grown significantly compared to previous years.
% second-hand operations by price segment
Second hand sale price
60%
700 600
50%
500
40%
400 30% 300 20%
200
10%
100
0
0
€/month
0-300
300-450
450-600
600-750
750-900
900> Thousands €
2012
2013
2014
2015
2016
2017
2018
2019
2020
Second hand sale repercussion price in Barcelona HORTA GUINARDÓ
3.645
LES CORTS
NOU BARRIS
GRÀCIA
SARRIÀ ST. GERVASI €/sqm
ST. ANDREU
3.507
3.368 €/sqm
€/sqm
EIXAMPLE 3.641 €/sqm ST. MARTÍ Diagonal Mar
SANTS MONTJUÏC
3.765
CIUTATVELLA
€/sqm
Repercussion evolution selling second-hand
BCN
8000
STC
STJ
7000 6000 5000 4000 3000 2000 1000 €/sqm
2T
3T
4T
1T
2T
2013
3T
4T
1T
2014
2T
3T
4T
1T
2T
2015
3T
2016
4T
1T
2T
3T
4T
2017
1T
2T
3T
4T
1T
2018
2T
3T
2019
4T
1T
2T
3T
resale housing by typology
40% < 90 sqm
>180 sqm
32% 11%
120-180 sqm requested SURFICES
1 2 3 17% 4 +4 90-120 sqm
5% 17 %
2% 2% 2%
19 % 31%
Number of bedrooms Requested
13 % 16 % 30% 50%
28 % 7% 7%
energy certificate
4T
2020
23 % 28 % 20 % greenDEX
MARKET REPORT
1T
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secong hand buyer profile
barcelona
27%
13%
40%
EmploYEES
20%
businessmen
investor
Freelancer or MANAGEMENT
8%
32%
>60 years
73%
<40 years
BUYER AGE
operations financed
FINANCEMENT
35%
33%
businessmen
Freelancer or MANAGEMENT
30%
12%
EUROPE
87%
13%
5% retired
15% public servant
30%
40-50 years
50-60 years
EmploYEES
70%
NATIONALS
ORIGIN OF THE BUYER
HIGH LEVEL PROFESSIONAL
Sant cugat
30%
<40 years
10%
>60 years
operations financed
BUYER AGE
FINANCEMENT
HIGH LEVEL PROFESSIONAL
AMERICA
95%
5%
52%
10%
14%
<40 years
50-60 years
2%
Freelancer or MANAGEMENT
28%
40-50 years
80% EmploYEES 80%
NATIONALS
ORIGIN OF THE BUYER
sant just MARKET REPORT
20% 40-50 years
40% 50-60 years
retired
6%
>60 years
operations financed
BUYER AGE
8%
8
businessmen FINANCEMENT
HIGH LEVEL PROFESSIONAL
NATIONALS
EUROPE
96%
4%
ORIGIN OF THE BUYER
difference has been the rate of sales, which has dropped from one period to another. On average, we have gone from 7 sales per month to 4 sales per month. Although we have had exceptions where the rhythm has grown.
SALE - Brand new Amat Immobiliaris Data This 2020, brand-new properties has been where we have decreased the number of operations carried out. This fact is the consequence of three factors; the most significant have been the COVID and the lock down that have reduced the possibilities of sale. Secondly, an expectation of some potential buyers thinking that with the end of lock down prices would drop; they compared the COVID crisis with the one in 2008 and it’s not the same case, the properties developer are in totally different situations and in most cases they are different. Finally, in our case this 2020 has caught us with the projects that we were already commercializing very mature.
The evolution of the repercussions to which we have sold in most cases has been gone up. One of the main reasons has been that many projects are very mature and at the end of work, and consequently the best properties of each project have been sold during 2020. This does not mean that prices have risen; in some cases, we have seen some upward correction, and we haven’t seen any downward correction. In the following infographics, you can see the data of repercussions by area and the characteristics of the buyers.
In general terms, between pre- and post-COVID, the
brand new housing sold by typology 52% 23% 23%
2%
< 90 SQM
> 180 SQM
42 % HOUSING
3%
58 % HOUSING 0 % HOUSING
15%
0 % HOUSING
62 %
0 % HOUSING 0 % HOUSING
20 %
0 % HOUSING
energy certificate
Number of bedrooms Requested
requested SURFICES
buyer profile BRAND NEW PROPERTIES
49% EmploYEES businessmen Freelancer or MANAGEMENT
81%
21%
21% public employees
5%
41%
40-50 anys
13% 50-60 anys
36%
10%
>60 anys
<40 anys
BUYER AGE
Planned operations to be financed
4% retired HIGH LEVEL PROFESSIONAL
Finally, this 2020 the growth of the necessary years of Annual income to acquire a home has stopped. In 2020 it has remained at a practically the same level as in 2019, stopping the growth of recent years.
AMERICA
88%
6%
EUROPE
6%
ORIGIN OF THE BUYER
Housing price/Gross annual income by household Source: Bank of Spain, Housing market indicators
7,2 years
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1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
FINANCEMENT
NATIONALS
MARKET REPORT
120-180 SQM
1 2 3 4
90-120 SQM
brand new housing repercussion in barcelona
VALLÈS OCCIDENTAL 2.648€/sqm
RUBÍ
5.401€/sqm
4.330€/sqm
SANT CUGAT
SANT JUST
ESPLUGUES
3.167€/sqm
CORNELLÀ
ALT PENEDÈS
MARESME
VALLÈS ORIENTAL
Amat office
RC RCELONÈS È 3.687€/sqm
L’HOSPITALET
3.423€/sqm
BAIX LLOBREGAT
GARRAF
2017 2016 2015 2014
6.270 €/sqm 5.966 €/sqm 6.150 €/sqm 4.864 €/sqm
3.824 €/sqm
2019 2018
3.932 €/sqm
2019
3.923 €/sqm 3.237 €/sqm 2.874 €/sqm 2.463 €/sqm
SARRIÀ ST. GERVASI
MARKET REPORT
LES CORTS 2017 2016 2015 2014
6.173 €/sqm 5.479 €/sqm 7.044 €/sqm 4.174 €/sqm
HORTA GUINARDÓ GRÀCIA
2017 2016 2015 2014
5.3000 €/sqm
NOU BARRIS
ST. ANDREU
EIXAMPLE SANTS MONTJUÏC
ST. MARTÍ Diagonal Mar
CIUTAT VELLA
2020 2019
10 2017 2016
4.926 €/sqm 5.785 €/sqm
2020 2019 2018 2017
3.680 €/sqm 4.482 €/sqm 4.019 €/sqm 4.219 €/sqm
3.765 €/sqm 6.452 €/sqm
AMAT LUXURY Amat Immobiliaris Data
As well as the plot market to build high-level singlefamily houses, this time it has been less predominant than others, since due to the lock down, buyers want to be able to immediately occupy the acquired properties, and not wait for a construction period. Probably, if there are no more lock downs, the immediacy feeling will reduce its intensity in 2021.
LD
MARKET REPORT
SO
LD SO
SO
LD
R
R
EN
EN
TE
TE
D
D
Paradoxically, this 2020 has been a good year for Amat Luxury. The number of operations over € 1,000,000 carried out in 2020 is higher than in 2019. As has already been commented in several places in this report, since the lock down ended there has been a significant rebound in the market. One of the segments that was most activated was Luxury, especially with this movement that we have described leaving the city of Barcelona looking for products such as houses with private gardens and bright spaces. Many markets such as Sant Cugat or Sant Just Desvern and Esplgues de Llobregat have benefited from this trend.
First, we thought it would be a short trend, which would end in August, but they have been sustained throughout 2020 and will continue in 2021. It must be contextualized the Luxury market is a relatively small market in number of operations, but significant in the amounts of the properties.
WHAT DO WE EXPECT FOR 2021? We expect a very continuous market, but at the same time, we are still very aware of the great uncertainties that surround us. Being able to make forecasts today is very complicated. Our vision is that the economic crisis derived from this health
crisis will become more visible in 2021, and although this time the residential real estate sector is not the center of the crisis as in 2008, we cannot pretend not to be affected if there is an economic crisis that affects many sectors of our economy.
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Barcelona · Via Augusta, 3 i Balmes, 345 | Sant Cugat del Vallès · Av Rius i Taulet, 17 | Sant Just Desvern · Bonavista, 63