Spain’s Economy Minister has bought a swish new home in a smart part of Madrid with a discount of 64pc.
It’s hard to fault the decision of Luis De Guindos – Spain’s Minister for the Economy and Competitivity (and formerly of Lehman Bros.) – to buy a fancy new apartment in a posh part of Madrid for a million Euros less than the asking price of a few years ago.
De Guindos and his wife are reported to be paying 587,000 Euros for a 2-bed penthouse of 132 m2 with communal gardens, pool, paddle-tennis courts and a gym, down from an asking price of 1.658 million Euros at the peak of the boom – a discount of 64pc. Press reports say he will probably rent it out or lend it to his daughter.
He is buying from the developer Reyal Urbis on a development of 88 luxury apartments called Hoyo 10 (set in a golf course) in the swanky La Moraleja suburb of Madrid, and around half the development is reported to be still on the market. You can check out the development here.
Reyal Urbis built the apartment during the boom with a loan of 1.1 million Euros from Barclays, so they are taking a big hit on this sale. Barclays are reported to have written off 614,784 Euros on the sale, and the developer will have to shoulder the rest.
As the property is being sold for the first time by a developer, De Guindos will also enjoy a super-reduced VAT rate of just 4pc, which will allow him to save tens of thousands of Euros on the purchase. At the start of next year VAT on new homes will go up to 10pc.
De Guindos negotiated the developer down from an asking price of 656,900 to the final sale price of 587,000 (before tax), a further discount of 11pc. Judging by the pictures the spec is high, and the area is prime Madrid suburbs, so I wouldn’t be surprised if this turns out to be a good investment.