Luxury housing in Spain booming –
After the impact of the pandemic, the real estate sector in Spain has been recovering positively, with property sales figures higher than pre-pandemic levels.
In this recovery, private buyers and investors interested in luxury properties located in large cities such as Madrid or Barcelona, on the islands and in coastal areas have played a major role. In times of crisis and uncertainty, it is to be expected that those with high purchasing power will take advantage of the supply and ease of purchase to make investments. Something that has been noticed to a great extent in the last year, especially taking into account the change that has taken place in the demand and needs of households. For example, more people want to move to properties with outdoor areas such as gardens and swimming pools, larger spaces and leisure areas, and in the case of luxury housing, with added services and values such as heated swimming pool, security, home automation and high quality finishes and materials.
Various studies highlight the increase in interest and transactions that have been closed recently in luxury housing, and the forecasts for this trend seem optimistic, but what are the reasons for the high demand for these properties? The Instituto de Valoraciones has analysed the current panorama to assess the situation of this market:
- Spain is “the place to be” for foreigners looking for luxury homes in prime areas of big cities, islands and coastal areas. The easing of travel restrictions and increased international mobility has boosted the reactivation of foreign investment in Spain, and in particular the demand in the luxury housing market by those with high purchasing power. We are already seeing how, on the one hand, Europeans, in search of destinations with sun, coast and good weather, and which offer them a good range of services, gastronomy, culture and leisure, are interested in luxury properties located in beach enclaves, such as the Mediterranean coast, and the Canary Islands and the Balearic Islands. On the other hand, the main and more commercial cities such as Madrid and Barcelonaattract the attention of Europeans and other foreigners from Asia and Latin America who buy properties both for themselves and for investment purposes. In fact, in Madrid, there are several new luxury housing developments that seek to satisfy this demand in prime areas such as Chamberí, Salamanca, Retiro, Centro and Chamartín.
- The pandemic’s hiatus has generated real estate opportunities with high profitability possibilities. Investing in property is still a safe bet, something that has become even clearer in the last year, when the brick industry, despite the impact of the pandemic, has resisted and even recovered in a very positive way. The luxury market is on the rise and this means that now is the time to invest before prices rise, taking advantage of real estate opportunities. This is coupled with investors’ desire to buy property to earn income and build wealth at a time when inflation is trending upwards, and housing offers better returns than other financial products. Thus, when assessing the best assets for investment, the main factors that buyers tend to evaluate in this type of housing are: location, comfort, quality of materials, services and common areas, and other factors such as home automation, technology and energy efficiency of homes are increasingly gaining prominence.