We are in the final stretch and after returning from holidays we find ourselves subject to an avalanche of news regarding the property market which, to the naked eye of any outside observer, would lead them to assume that we have entered into a new upward cycle, especially in cities such as Barcelona, where all the indicators point to positive figures and constant growth. The latest data obtained also leaves no doubt as to the increase in the number of transactions, in sale prices and, specifically, in the number of mortgage loans granted by credit institutions to individuals.

Does this mean that all that glitters is gold? Well, partly yes. The specific influence of the construction sector continues to be vital for the recovery of the Spanish economy (with all the overtones and precautions which we are prepared to conjure up), and by extension the raising of the interest of investors, since by listening to the guidelines dictated by the top financial advisors, every diversified portfolio must include property price benchmarks.

And it is precisely the quality of the product (or, to be more exact, the lack of quality) which may be the biggest handicap for the Spanish property market in (both) the short and medium term. In this respect, whoever has had the opportunity to chat for a few minutes with international investors will be able to confirm that, regardless of their origin, feelings and investment aims, they all share an interest in our market while at the same time as demonstrating their growing concern with the evident lack of quality property in "prime" areas. Also, although this reality may appear discouraging, there is no doubt that it offers a unique opportunity to promote new market areas which may overcome the existing discrepancy between an offer that is shown to be clearly inadequate and in some cases outdated, and a keen demand for recognised property in prime areas in the main capitals, in order as a last resort to satisfy the specific needs of highly competitive sub-standard investors.

The range of shares in which to invest is varied, but there is no doubt that all the indicators reveal that we find ourselves in a favourable climate for promoting models of property activity based on the criteria of quality and specialisation, thus encouraging the roll-out of new market sectors ("niche markets") characterised by the search for high ratios of return on investment and the assurance of yields unattainable in sectors that may be classed as traditional sectors in which to invest.

In this area, the standout sectors are those fully identified with British and American markets, but still having the broad wide experience for their ultimate consolidation in the Spanish market, which include:

  1. The Healthcare sector, leveraged by irrefutable demographic data such as the aging of the Western world's population, boosted by a gradual and radical reduction in public investment that ultimately must serve as an incentive in order to attract the private financing required to satisfy the care needs (in the widest sense) inadequately looked after by the state organisations providing such care.
  1. Student accommodation, taking as its development base the constant migration of students attracted by educational, socio-economic, cultural and environmental conditions highly sought after internationally.
  1. Young rental accommodation", via the creation of a new rental residential areas intended for young, highly qualified workers, characterised by capturing highly technical professional activities and based on ongoing geographical mobility.
  1. And linked to and as a consequence of the markets mentioned above, developing alternative and complementary projects ranging from the Cultural Hubs, following the model of, amongst others, Vienna's Museum Quarter; the increasingly established and widely debated phenomenon of smart cities, connected to urban developments based on the knowledge economy and the work-life cities, model 22@Barcelona being a good example of development; without forgetting the Green Development Industry, based on the establishment and development of the concepts of sustainable activities and green cities.

Ultimately, if we acknowledge without embarrassment that a good share of the paths to encourage immediate investment lead us once more to the property sector, we must be able to adopt the appropriate actions and take the measures needed in order to ensure that such paths are well lit and adequately built so we may walk over them with a confident and sure stride, once we have learnt from our previous mistakes.

Barcelona, 10 September 2016

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