The latest Knight Frank report on the luxury end of the Spanish property market is generally positive, thought pointing out there remains a “backdrop of global uncertainty.”
Written by Kate Everett-Allen from International Research, the report makes clear that when it comes to prime property in Spain, foreign buyers are key players.
“Spain has earned the title of Europe’s comeback kid but to what extent is the country’s prime property market mirroring the economy’s return to growth?” she asks.
Noting that the Spanish economy has recovered strongly since the crisis, with growth of 2.6% in 2016, compared to 1.9% in the UK (pre Brexit), and 1.5% in Germany, Kate identifies two key trends in the luxury market this year.
- The rise of non-EU buyers with Latin Americans in Madrid, Middle Eastern buyers in Marbella, and the Swiss in Ibiza. “The profile of Spain’s luxury buyers is shifting,” she says.
- The strength of the €1m-€3m price band, which is now “the most active market segment” in many areas.
She goes on to look at the most important prime property markets in Spain, where foreign buyers are now key players.
- “The key districts of Salamanca, Jerónimos and Chamberí account for around 70% of prime property searches in Madrid.”
- “A third of Madrid’s prime property buyers are now from abroad.”
- Latin American buyers were involved in 30% of all Knight Frank Madrid sales in 2015.
- Venezuela developers are behind several luxury developments in the city
- “Prices in Barcelona levelled out in 2015 and the prime areas of the city such as Eixample and Zona Alta have seen a small uptick in prices.” I’m seeing signs of more than an uptick. From what I can tell prices in the Eixample have jumped. Developers refurbishing buildings and flats in the Eixample tell me their acquisition prices are up 30% or more. And according to Tinsa, Spain’s leading appraisal company, prices in the Eixample rose 11% year-on-year to the end of Q2.
- Confidence is returning and sales are up 86% since 2012
- Local buyers are coming back into the market, but foreigners still dominate the luxury end.
- British demand for high-end property in Barcelona rose with the pound in 2015, whilst interest amongst French, Belgian and Dutch buyers also strengthened.
- Rising sales volumes suggest confidence is returning to Marbella’s property market.
- Prices are slowly rising, especially for newly-built modern villas in good locations.
- Interest from Middle Eastern buyers has increased significantly.
- Town planning problems in Marbella are refocusing attention on properties with no planning issues, and areas such as Benehavís and Estepona.
- Mallorca’s prime property market “has entered a new cycle of growth” after bottoming out in 2014.
- Andratx, Sin Vida and Deià are the destinations of choice for British, German, and Scandinavian buyers.
- Local buyers are also back in the market.
- Mortgage lending is up.
- New home building are on the rise.
- “The top-tier of Ibiza’s property market has become uncoupled from the wider market and is witnessing strong price gains as demand outpaces supply.”
- Home sales are on the rise as foreign demand increases.
- Attention is turning to inland property as southern coast becomes more developed, and new road to San Juan in the north east will boost this trend.