Forecasts For The Year 2022 In The Sant Cugat Del Vallés Real Estate Market

The covid-19 pandemic has had an undeniable social and economic impact on the real estate market in Sant Cugat.

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The severity of the health situation has led to a significant reduction in the number of real estate transactions in general. Oversupply without sufficient demand due to doubts about the future always implies a contraction in prices. From the real estate point of view, the pandemic has had disparate effects depending on the geographical area and the characteristics of the properties. This explains why, within the same city, the behaviour of the market has varied depending on the conditions and characteristics of the areas and, above all, the type of housing, depending on the neighbourhood. There are areas where the economic impact of the health crisis has been greatest and this has been most clearly reflected in housing values. This is not the case in Sant Cugat del Vallés. The city has resisted more than well, as the real estate market in Sant Cugat has been unstoppable in the last year. According to the latest publication of the Ministry of Public Works, there has been a +36% increase in transactions compared to the previous year. In relation to prices, as we talked about in one of our last articles “Evolution of house prices in Sant Cugat del Vallés in 2021”, almost all neighbourhoods have stood out for their double-digit increases. Sant Cugat del Vallés is a municipality close to the capital Barcelona and is the fourth richest city in Spain. This may be one of the factors that have allowed it to weather the covid-19 crisis better, according to experts. But there are more reasons. Urban planning and the good health of its real estate stock have cushioned the impact of the crisis to a minimum and show that it will be, and is already being, one of the first cities to emerge largely strengthened. The trend in buying and selling prices at the moment is, in general terms, clearly upwards. And this can be explained by the fact that it is a city with a real estate sector with a consolidated base and structure that has been growing steadily since 2014. Its privileged location and a design that favours urban traffic for pedestrians and drivers are aspects that are highly valued in the decision to buy a home. Sant Cugat has pedestrian streets, parks and recreational areas, very suitable for families, with playgrounds for children, local shops and something very important to take into account: it is a city open to nature as it is next to the Collserola natural park. A city far enough away from the capital, Barcelona, to avoid the inconveniences of a big city, but at the same time close enough to be accessible by good transport links. All this makes Sant Cugat a privileged city for those who live there and very attractive especially for current residents of Barcelona who see it as an ideal place to live. Moreover, the strength, good structure and dynamism of its real estate market are reflected in both the sale and purchase of properties and in rentals. The annual average number of transactions is close to 1,000.

How will the real estate market in Sant Cugat react in 2022?

It is difficult to carry out a forecasting exercise as the health situation has a very decisive effect on the economy and therefore on the real estate market. At Proddigia we believe that, in addition, factors such as the arrival of European funds and the performance of the GDP will be very decisive. There is considerable discrepancy between the OECD, the Government, the Bank of Spain and some banking research centres regarding the growth of the Spanish economy in 2022. The difference in estimates is more than 2 percentage points between the most optimistic and the least optimistic. Another factor influencing the buying and selling market is bank interest rates, which are expected to remain at their current level, as long as the European central bank continues to buy public debt. Data from the Statistics on the transfer of property rights published by the National Statistics Institute (INE) on Monday 15 November show that the month of September 2021 closed with 53,410 property sale and purchase transactions in Spain. This is an unprecedented figure since the real estate bubble of 2008, only surpassed by the 54,801 sales in April of that year. Something similar occurs with Sant Cugat del Vallés, up to September 2021, a total of 793 transactions, a historic figure for the last decade, only surpassed in the years prior to the 2008 crisis. And this leads us to believe that, being Sant Cugat a city with privileged characteristics and environment, the housing market will experience a very sweet year 2022, with an increase in real estate transactions of more than 10% and an increase in prices in the most demanded areas of more than 6%. At Proddigia we estimate that there will continue to be a significant demand from buyers from Barcelona, who, due to the strict confinement suffered and the arrival of teleworking, are looking for a place in Sant Cugat del Vallés with a higher quality of life and better equipped homes: new flats, large green areas, facilities such as swimming pool, large terraces or garden, storage room, parking on the same property, etc. To this must be added, Sant Cugat’s own internal demand, which, as a result of the lack of housing supply in the rental market, the high prices demanded and the low interest rate forecast, families will continue to decide to buy their first home. As far as the rental market is concerned, all the experts generally predict a drop in average prices. In the case of Sant Cugat, we are betting on a decrease in the average rental price without abruptness, responding to the stability that characterises this city. Thus, transactions in this particular market have meant that the average rental price per square metre, which in January 2021 was 13.2 €/m2. in October 2021 is 13.3 € m2. If we calculate from October 2020 to October 2021, the price has risen from 12.9 €/m2. to 13.3 €/m2., which shows a slight upward trend within a market with great stability. The explanation for the behaviour of rental prices is identical to that given for the sale and purchase market. In other words, Sant Cugat is considered an ideal city to live in due to a series of characteristics that make it highly recommendable and attractive also for those people who are considering renting. In general, rental prices are expected to maintain this stable trend, although with slight decreases, in no case more than 3%, and unlike the increase in average sale and purchase prices that we foresee. One factor to consider is Law 11/2020 regulating urgent measures to contain rents in housing rental contracts, which came into force on 22 September 2020 and which includes Sant Cugat as one of the 27 municipalities for which a reference rent has been set. In practice, this rental price intervention regulation has only affected housing in the urban centre of Sant Cugat, without common areas or services such as swimming pool, parking, garden areas… where, therefore, the special characteristics cannot have an impact. Consequently, this leads us to consider that a drop in rental prices is foreseeable for homes in the “centre” of Sant Cugat. In the rest, we foresee a consolidation and stability in rental prices, with small increases. The aforementioned law has caused owners to hold back when it comes to renting out their properties, opting instead to sell them. Others prefer to leave them empty and another solution to avoid the law is to rent them out on a seasonal basis. In short, our prediction is that Sant Cugat will maintain stability in its real estate market, both in terms of buying and selling as well as renting.