The latest Knight Frank Prime Global Cities Index shows the luxury property market in Spain is buoyant, particularly in Madrid, where prices have rise 5% in the last six months – the second biggest increase of the EU cities included in the ranking.
Translation and adaptation of an article published in the Spanish daily El Mundo
According to Knight Frank’s residential director in Spain, Carlos Zamora, three factors lie behind the price increases: A lack of supply of luxury projects in prime areas; pressure from demand, and the greater sophistication found in new developments.
Constanza Maya, general manager for Engel & Völkers (E&V) franchises in Spain and Portugal, confirms the picture. “More and more clients, Spanish as well as foreign, are interested in higher-priced properties,” she told the Spanish daily El Mundo. Maya reports that her company has recently sold a Spanish property for over €20 million, “something unimaginable just a few months ago”.
Madrid rentals for €8,000 a month
Gonzalo López-van Dam, a partner at the property company Promora, claims that prices in the so-called ‘Golden Mile’ in Madrid have reached 2006 levels. “What’s more, in La Moraleja and La Finca areas, people are renting again for over €8,000 a month. That is very significant,” he says.
E&V highlight the importance of foreign demand in the recovery of the high-end sector. They point out that Madrid attracts a majority of high-net-worth individuals from South America, while in Barcelona, it’s European clients, led by French, Belgians, Dutch and Germans. The market is coastal areas is led by British buyers who have decided to invest in Spain after Brexit.
Jaime Valcarce, CEO at Jaime Valcarce Consulting Inmobiliario, and estate agency in Madrid, has also noticed increasing competition between buyers. “Those who take too long to decide run the risk of another client coming along and beating them too it,” he told El Mundo. “There are many more buyers than this time last year.” Valcarce also warns of a clear imbalance in the market: booming demand in face of short supply, which is pushing prices up.