2023 is tense but we'll survive: Barrondo on 2024 and the crisis

Ivan Barrondo, who holds a bachelor's degree in economic and business sciences, is the CEO of John Taylor in Spain and Andorra. He has spent most of his professional career in the real estate industry. He is now monitoring the luxury housing market in Spain and predicts a "turbulent" 2024. "Next year we will have to digest what we couldn't digest in 2023," Barrondo says, referring to the upcoming shutdown in the real estate business in an interview with idealista/news.

Experts believe that times of change are coming to the Spanish real estate market. As an expert, what do you think 2024 will be like? According to preliminary estimates, worse than we expected in 2022. We thought that 2023 would be a transitional year,'''with some macroeconomic uncertainties and tensions (interest rates, inflation) and that we would internalize it better and faster. But we won't. We will have to internalize this situation in 2024. I'm talking about two realities: the majority and luxury. Luxury always survives these situations better because people who have more money than they need are usually less dependent on the volatility of the economy. Thus, there is a very strong market for luxury with a lot of demand and little supply. This causes consistently high and rising prices for premium properties. At John Taylor, you are experts in the luxury market. How do you think this sector will develop over the next two years? Luxury still remains favorable for the seller and''s a little less favorable to the buyer, but in both cases it's profitable. The world is increasingly polarized - the rich are getting richer and the poor are getting poorer. This will lead to prolonged shopping and higher prices.

Is luxury the sector that suffers the crisis later and recovers first? This rule works for both luxury goods and experiences, as well as real estate. If there is a crisis, those with more money than they need have opportunities and deals they can take advantage of. And this stimulates the sector: the seller benefits and the buyer even more because they are buying at a good price.

Your company has an international presence, but can you describe the specifics of the luxury market''real estate in Spain? We are a French company with a high degree of internationalization. The luxury housing market in Spain is not very different from that in other parts of Europe.

In addition, demand needs to have an international component. The main luxury destinations in Spain are not just sun and beach... No, it's not just that. Madrid has been attracting attention for a long time. There is a lot of investment coming into the capital and we don't have sun and beach. We are seeing demand from Latin America, which has been talked about for a long time, but a newer kind of demand is American demand, which is growing all the time.

'In a crisis there are always two''work anywhere, and it's favorable for luxury.

You talk a lot about Madrid, the Balearic Islands... but what about Barcelona? At the moment we don't have a physical presence there and we are looking for local partners. Barcelona used to be a capital in its own right, with its own character, but in the last eight years it has lost its appeal due to political and municipal pressures. For luxury at the moment, Barcelona is more faded and Madrid is more dynamic, without a doubt.

What about luxury housing prices, where are they at now and what do you think will happen in the future? I don't know where the limit of price fluctuation might be, because if I knew that, I would be the richest person in the capital. In Madrid we''have gone from prices of €10,000, €12,000 or €15,000 per m2 to reports that the next properties to come to market could reach €19,000 per m2. These are very tight markets: with every million, the price demand goes down, but the price per m2 goes up.

Does the Housing Act have any impact on the luxury housing market in Spain? I have not noticed this impact on prices. Rent restrictions are not yet enforced, it seems that they do not exist. I also don't believe in market restrictions. We will only be able to control prices if there is more supply, but setting prices for owners will only cause some investors to leave the market and prices will continue to rise. I have not seen an impact on the market, but it is there in the area of intermediation as we are not allowed''take payment from tenants.

Does home theft have any impact on the luxury business in Spain? I haven't experienced it. In our market, I don't know of any cases of home theft. I don't know the details and figures, but I think it happens more in cases of half-completed buildings or vacant properties...