Luxury housing does not lose its luster for foreigners

The implementation of the covid passport and the speed of vaccination has given light to the recovery of several sectors, including real estate. In the current context, it is expected that, by the end of 2021, more than 30% of buyers of Madrid's luxury homes will be large investment portfolios and international executives. The capital is leading the way as Spain's favorite prime destination for U.S., Latin American and Asian buyers.

89% of prospective buyers would be willing to spend more time during the year on a second home in Spain

Investment or second homes are the main preferences of international businessmen. In fact, according to the BARNES Global Property Handbook 2021, 89% of high-end buyers believe they will spend more time during the year in their second home, while 72% believe they will alternate equally between their first and second home. 

Although private buyers tend to opt for the enjoyment of a holiday home, the luxury real estate market goes further: 'The aim is to be able to attract buyers to establish their first residence in Spain. To achieve this, the Golden Visa will now also be granted to investors looking to develop or build their own home on previously purchased land. However, purchases through this express visa are still in the minority,' says Eduardo Crisenti, director of our BARNES Madrid offices.

Spain is becoming a favourite destination for many foreigners

In the first half of 2021, foreign buyers accounted for 30% of purchases in the luxury real estate sector in Madrid. However, both their profile and that of the supply is quite heterogeneous. If we focus on European buyers, the focus is on refurbished second-hand properties. High ceilings and a variety of architectural elements are key for buyers. On the other hand, Latin American, American and Asian buyers prefer new-build properties, with home automation, high security and a style similar to that of the big cities in their respective countries.

In terms of housing characteristics, the districts of Salamanca, Centro and Chamberí are the most sought-after in the city of Madrid. The prices of second-hand properties in the capital are around 6,700 euros per square metre, while new-build properties are above 9,300 euros per square metre. The average surface area is around 150 m2, with 3 bedrooms, spaciousness, light and a terrace. Whether it is for investment purposes, as a second home or to live in, what is certain is that people are now opting for large spaces, terrace areas, exteriors and green areas.

Demand indicators in the luxury sector are encouraging and predict an increase in the second half of the year. One of the essential factors for the return of foreign investment has been the implementation of teleworking. The new working habits will lead to an increase in demand for properties located in peripheral areas of the big cities. The competitiveness of property prices combined with the climate and Spain's cultural heritage have become elements of great investment attraction for large international portfolios. 

© ABC Economia - published on Barnes Madrid on 26/07/2021

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