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Barcelona Real Estate Market Q3 & Q4 2011 As predicted in our market report dated August 2011, the market for mainstream Barcelona prop- erty performed poorly in the second half of 2011 while demand for quality properties at the higher end of the market remained strong. This indicates there is still some difference in opin- ion between sellers and buyers as to the real value of Barcelona properties. Those sellers who have properties in prime locations and / or with desir- able features are holding their ground and buyers looking for heavily discounted apartments and homes are having little success at finding bargains in this segment of the market. According to the statistics, Spain and Barcelona property transactions remained fairly level in Q3 and Q4 2011 - dropping slightly each month until October. Towards the end of Q4 2011, there were slight increases in property sales which seem likely to have been due to the halving of sales tax on new build properties. The modest in- crease in the number of sales was common across the entire Spanish property market, indicating that a more widespread driver than anything specific to Barcelona was in effect. The high level of demand for luxury Barcelona real estate we noted in the first half of 2011 contin- ued through the year and Lucas Fox Barcelona recorded its best year’s business since starting trading in 2005. “Our predictions made in August 2011 proved to be right and sales and rentals in the luxury end of the market held steady.” Commented Alexander Vaughan, Director of Lucas Fox. “The shortage of high quality properties on the market in Barcelona means that those properties which are valued ac- curately still sell reasonably quickly. Since 2007 we have seen significant price drops across the board and buyers can now secure properties at prices up to 30% lower than they were 3 years ago.” According to internet property portal, Kyero.com, asking prices for Barcelona property dropped slightly in Q4 2011, but still finished the year higher than at the end of Q4 2010. Barcelona aver- age asking prices finished the year at €640,000, 172% higher than the Spanish average and 10% higher than the greater Barcelona province. Vaughan commented “Obviously it is good to look at the statistics produced by portals like Kyero but our on the ground experience shows that sellers are adjusting their asking prices in line with buy- ers’ expectations and that asking prices actually dropped through 2011.’’ BARCELONA REAL ESTATE MARKET REPORT Q3 & Q4, 2011 Local economic conditions mean that sellers remain open to negotiation enabling buyers to get good value properties at discounted prices. ’’ Figure 2: Barcelona City Asking Prices 2011 Source: Kyero.com Figure 1: Urban Property Transfers (Sales) – Barcelona and Spain 2011 Source: National Institute of Statistics (ine.es)

Barcelona Real Estate Market Report Q3-Q4-2011

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Letterhead Barcelona.pdf 24/1/11 13:40:47

Barcelona Real estate Market Q3 & Q4 2011As predicted in our market report dated August 2011, the market for mainstream Barcelona prop-erty performed poorly in the second half of 2011 while demand for quality properties at the higher end of the market remained strong.

This indicates there is still some diff erence in opin-ion between sellers and buyers as to the real value of Barcelona properties. Those sellers who have properties in prime locations and / or with desir-able features are holding their ground and buyers looking for heavily discounted apartments and homes are having little success at fi nding bargains in this segment of the market.

According to the statistics, Spain and Barcelona property transactions remained fairly level in Q3 and Q4 2011 - dropping slightly each month until October. Towards the end of Q4 2011, there were slight increases in property sales which

seem likely to have been due to the halving of sales tax on new build properties. The modest in-crease in the number of sales was common across the entire Spanish property market, indicating that a more widespread driver than anything specifi c to Barcelona was in eff ect.

The high level of demand for luxury Barcelona real estate we noted in the fi rst half of 2011 contin-ued through the year and Lucas Fox Barcelona recorded its best year’s business since starting trading in 2005.

“Our predictions made in August 2011 proved to be right and sales and rentals in the luxury end of the market held steady.” Commented Alexander Vaughan, Director of Lucas Fox. “The shortage of high quality properties on the market in Barcelona means that those properties which are valued ac-

curately still sell reasonably quickly. Since 2007 we have seen signifi cant price drops across the board and buyers can now secure properties at prices up to 30% lower than they were 3 years ago.”

According to internet property portal, Kyero.com, asking prices for Barcelona property dropped slightly in Q4 2011, but still fi nished the year higher than at the end of Q4 2010. Barcelona aver-age asking prices fi nished the year at €640,000, 172% higher than the Spanish average and 10% higher than the greater Barcelona province.

Vaughan commented “Obviously it is good to look at the statistics produced by portals like Kyero but our on the ground experience shows that sellers are adjusting their asking prices in line with buy-ers’ expectations and that asking prices actually dropped through 2011.’’

BARCELONA REAL ESTATE MARKET REPORT Q3 & Q4, 2011

“Local economic conditions mean that sellers remain open to negotiation enabling buyers to get good value properties at discounted prices.’’

Figure 2: Barcelona City Asking Prices 2011Source: Kyero.com

Figure 1: Urban Property Transfers (Sales) – Barcelona and Spain 2011Source: National Institute of Statistics (ine.es)

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Barcelona Property Sales PricesInternet property sites Idealista and Fotocasa shared a fairly consistent view of property sales prices throughout 2011, with a slight downward trend observed across the year. Average property prices ended the year at €3652 per m2.

Barcelona District Average Sales PricesAs has been the case for the past year, the Barcelona districts of Sarria-Sant Gervasi and Les Corts had the most valued properties across the Barcelona city neighborhoods. All districts across the city recorded a drop in average property values for the fourth quarter, with the decrease least pronounced in Les Corts (1.3% drop from Q3). Most other districts recorded a quarterly variation of around 3% from Q3 to Q4 2011.

Barcelona Rental MarketThe Barcelona rental market remained fairly sta-ble throughout 2011. Reversing a trend emerging in the first three quarters of the year, average rental prices in the sought after Old Town (Ciutat Vella) dropped once more to an average of €12.8 per square meter. Les Corts, Sant Marti and Sarria Sant Gervasi gained a point or two, but overall

rental averages remained stagnant all year, finish-ing on an average of €11.6 per square meter, only 0.1 lower than in the first nine months.

Short-Term Rental Demand

Short-term rental demand in Barcelona remained strong throughout the year, with 17.8% more airport arrivals than in 2010 and over 120,000 holiday apartment overnight stays at the height of the summer period in Catalunya.

Barcelona enjoyed ongoing growth in tourism figures and occupancy rates for both hotels and tourist apartments and continues to be one of Europe’s most popular tourist destinations.

Data on airport arrivals and overnight stays for foreign travellers in holiday apartments both provide a good indication of short-term rental demand in Barcelona.

While data on holiday apartment overnight stays is only available at the Catalunya provincial level, it is a useful indicator for Barcelona demand, as the majority of overnight stays occur in the city. For investors in commercial properties aimed at the short-term rental market, and for private buy-ers who are considering leasing their properties during the summer months, the healthy levels of tourism and high demand for short-term rental apartments suggest the potential for a strong yield during the middle of the year.

By the end of November 2011, Barcelona airport had seen almost 32 million visitors arrive through-out the year, a 17.8% growth on 2010 figures.

Foreign InvestmentAccording to Catalan Statistics, foreign invest-ment in real estate across Catalunya (including the areas of Barcelona, Girona and Lleida) totalled 170.76 million Euros for the first three quarters of the year (to end of September 2011). This accounted for 11.1% of all Catalan investment

Figure 4: Barcelona Average Property Prices by District Q3 2010 – Q4 2011Source: Idealista.com

Figure 3: Barcelona Property Sales Prices Q3 2010 – Q4 2011Source: Fotocasa.es, Idealista.com

Figure 6: Barcelona Average Rental Prices by District (€ per m2)Source: Idealista.com

Figure 7: Catalunya Overnight Stays in Holi-day Apartments by Foreign Residents 2011Source: National Institute of Statistics (ine.es)

Figure 8: Barcelona Airport Arrivals 2011Source: AENA

Figure 5: Barcelona District – Average Property Price by District as at Q4 2011Source: Idealista.com

Figure 9: Foreign Interest in Barcelona Properties Q3 – Q4 2011Source: Lucas Fox website analytics

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Letterhead Barcelona.pdf 24/1/11 13:40:47

and 17% of all Spanish foreign investment in real estate for the first three quarters of 2011.

Interest in Lucas Fox properties by foreign inves-tors remained healthy throughout Q3 and Q4 2011. The majority of foreign investors came from the UK, United States, France, Russia and the Netherlands.

Lucas Fox Analysis and Predictions 2012

“The Barcelona property market in 2011 proved to be a tale of two cities. While there were pricing adjustments at both ends of the market, Barce-lona’s mainstream property market remained sluggish while strong demand from foreign and local buyers for quality properties in the best locations kept the luxury market active. The new majority government in Spain and less negativ-ity about the Eurozone are both positive factors that we believe will mean that 2012 will be a good year for Barcelona property at the high end of the market. The local economic conditions mean that sellers remain open to negotiation, enabling buy-ers to get good value prices at discounted prices of up to 30% below the asking prices of several years ago.” said Alex Vaughan, Lucas Fox Director.

About the Lucas Fox Market ReportsYou can keep receiving up-to-date market re-ports from the Lucas Fox International Properties team. Subscribe to future updates at our website or bookmark our blog for the latest news on the Barcelona real estate market. For questions about Barcelona real estate, please contact one of our sales staff at +34 933 562 989.

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Anthony LeatonMarketing Manager

Stijn TeeuwenDirector

Alex VaughanDirector

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