The creation of the superblocks in Barcelona has improved the urban space, but it is beginning to have a devastating effect on the real estate market that is going to change the profile of the residents of the neighborhood and drastically accelerate gentrification: the departure of the usual residents for the benefit of of people with high levels of income and who will live in the city temporarily, as confirmed by a study carried out by the CBRE consultancy.
The firm points out that in the new superblocks, and especially in the one on Consell de Cent street, which is already open, the real estate market has skyrocketed: rental income has doubled in the last 18 months, so that the rent average in Consell de Cent street already exceeds 3,000 euros per month, and the number of flats that are rented per season (with contracts of less than one year) has tripled.
According to Xavier Güell, director of the consultancy in Barcelona, ??“it is clear that the city of the future must give more space to pedestrians, have more green areas and less traffic, and that these changes can generate resistance. But the execution of that vision, in Barcelona, ??has been carried out in a way that could be greatly improved, among other things because it requires making alternative means of public transport available to citizens that do not exist today”.
The consultancy has studied the evolution of the real estate market in the superblocks of Consell de Cent, Borrell, Rocafort and Girona streets and has compared it with the adjacent streets, in the section included in the Eixample district. “We began to notice the effects on the real estate market from August 2022, when the works were already advanced and it was seen that the project would become a reality,” says Güell.
Overall, the CBRE study shows that rental income in the superblock areas has grown at a rate three times that of the adjacent streets. While prices were similar in February 2022, last month renting a flat in the superilles cost an average of 2,632 euros per month, 65% more than 18 months earlier. The rent per square meter has practically doubled (up 87%, up to 32.8 euros/m2/month), so that tenants pay an additional 11 euros per month for each square meter compared to apartments located in nearby streets .
The increase is even greater in Consell de Cent street, the most emblematic of the new urbanism, where renting a flat now costs an average of 3,107 euros per month, 78% more than what was paid 18 months ago and almost 1,100 euros more than the rent that is paid for a flat in the neighboring street of Valencia. In these last 18 months, rents have skyrocketed throughout Barcelona, ??but especially in Consell de Cent street, with a rise of 110% compared to February 2022.
The rental market in the area of ??the superblocks is not only more expensive, but also reduced. “There are more owners who choose to put their flats up for seasonal rent, perhaps to avoid being affected by the new Housing law,” says Güell. Thus, in Consell de Cent street, 50 homes were sold in May in this type of short-term rental, two and a half times more than in February 2022, while in the neighboring València street there are only three more apartments in this type of lease than in the previous period.
Güell points out that the superblock has also given more vitality to the buying and selling market, although for the moment it has not had an excessive effect on prices. Thus, flats for sale on Consell de Cent street have increased by 26%, while on Valencia street they have fallen by 26%, in line with the cooling off that the real estate market is suffering in Spain due to the rise in interest rates. Sales prices have also evolved unevenly, and in the superillas they have risen by 4%, while they have fallen in the adjacent streets, up to 18% in some cases. “We don’t know very well what this drop is due to,” Güell acknowledges, which could be because worse apartments are now being sold than in the previous period, or because traffic problems mean that these streets, in contrast to the pacified ones, are perceived as as less attractive to potential buyers. Now, a flat on Consell de Cent street costs an average of 3,389 euros/m2, 28% more than on València street.
Olga Beltrán, associate director of the residential department at CBRE Barcelona, ??recalls that it is not the first time that an urban transformation has had a great impact on the real estate market in an area, as happened with the coverage of sections of the Ronda de Dalt or the Mig round. “The trend in cities is going there, and people really appreciate that mayors take these kinds of initiatives,” she recalls.
The changes in the real estate market in the superillas, says Güell, are not due to the presence of funds or institutional investors. “Some buildings are owned by a single owner, but it is not common,” he recalls. In addition, the uncertainties introduced by the housing law have made investors less willing to buy to rent. “There is only interest in seasonal rentals, for short periods, and in general developers return to the model that was the majority until a few years ago of promoting to sell buildings floor by floor.”
“If after this electoral cycle the housing legislation changes, it is possible that foreign investors will return,” he points out. In his opinion, funds and insurance companies want to have residential buildings for rent, even if they provide low returns, of the order of 4%, “because they are very stable investments: it is very difficult for the building to remain empty. There is a lot of demand from people who want to rent a flat in Barcelona, ??and if the law changes, there will be no shortage of investors”.
