Spanish bank real estate is losing popularity amid the Catalan crisis.
Many people wishing to buy real estate in Spain from banks previously preferred Catalonia, but the results of the elections in the autonomous region held on December 21 may change the situation on the real estate market. This is especially true for premium properties, which make up the majority of the Catalan market.
After two months of constitutional crisis, Catalans went to the polls again on December 21. Catalan nationalists won a majority vote in the regional parliament and can form a united coalition. This is bad news for the region’s economy and real estate market.
Rating agency Moody’s has warned that the election results will have a negative impact on the region’s economic growth and finances if the new government continues its policy of secession from Spain at any cost. Many companies have already decided to move their headquarters out of Catalonia. Joan Rosell, president of the Catalan business association, says the departure of companies, the decline in consumption and investment have already led to a decline in economic activity. Only a government that acts within the law and respects the Spanish constitution can repair the damage that Catalonia has already suffered.
Many experts believe that the unstable situation will affect the Catalan real estate market. There will be a decrease in demand, both from foreign investors and from local buyers. This is especially true for Barcelona, where foreign buyers play an important role. Banks will probably tighten the conditions for issuing mortgages. The decrease in demand will have an impact on prices, but it is impossible to say when their decline will begin and how pronounced it will be.
Potential foreign investors have already seen that the Catalan government does not respect the law. Catalonia is now considered a risky place to invest, which reduces the value of assets placed there.
On the one hand, buyers will be able to purchase property at a lower price, but the investment will be less profitable. However, for those who think long-term, buying Catalan property may be a good idea, given the region’s popularity in tourism and leisure.
