By Adrian Bishop
The Spanish prime property market is in “full recovery mode”, with one agent seeing sales up by more than half – and the Catalonia political troubles having little impact.
Average prices for luxury Spanish homes have risen 13% in the last year, says Stijn Teeuwen, co-founder of agent, Lucas Fox.
Sales volumes for the first nine months of 2017 have risen by more than 50% year-on-year, with Valencia and Sitges seeing sales double and Madrid notching up a 70% increase, says the agency.
The average price of a top property rose by 13%, from €709,111 in September 2016 to €802,000 a year later, with more sales in ultra-desirable districts including Salamanca in Madrid and Turó Park in
Stijn Teeuwen says, “We expect these key trends to continue in 2018 and beyond as the property market recovery gathers pace.
“With regards to foreign buyers, we expect sales from US, Canadian, Middle East and Chinese buyers to continue an upward trend, especially in the cities, whilst we also expect that the Scandinavians, French, Dutch and Germans will account for a bigger proportion of sales and the British a smaller proportion due to Brexit in the coastal regions such as Marbella and the Costa Brava.”
Lucas Fox expects to see more growth along the Barcelona coast (Maresme and Sitges) as some buyers get priced out of the Barcelona city market, as well as the desirable areas of Salamanca and Chamberí in central Madrid, which appeal to foreign investors, Latin American buyers and wealthy local clients.
The Spanish property market is now in full recovery mode and offers a plethora of advantages for opportunistic buyers, explains Mr Teeuwen.
“Along with a growing economy, low interest rates and Spain’s obvious lifestyle benefits, Spain offers attractive property prices – up to 30% below the peak of 2007 in some areas.
“These prices are now rising steadily offering investors the potential of good capital appreciation. Compared to other major European cities, even high-end homes (new developments, for example) are considerably better value. In Barcelona and Madrid, they average between €5,000 and €6,000 per square metre, whilst in Paris or London, prices start at around €9,000 per square metre. Long-term rental yields in prime areas are also healthy – up to 5% in ultra-prime areas such as Barcelona Old Town and Chamberí in Madrid.”
In 2017, it’s a different set of circumstances compared to ten years ago. The construction industry represents a much lower proportion of Spain’s Gross Domestic Product (GDP), there’s more control of risk indicators, and overall, investors are much better informed.
Following the unsuccessful bid for Catalonian independence, there was a temporary dip in the level of enquiries from national and international buyers, but these have already recovered to 2016 levels.
“Some investment buyers in Barcelona city are choosing to put their purchase on hold until after the elections on 21st
December, but we are continuing to close high-end deals with national and international clients. To date there has been no impact on closing prices.
“We believe that the most likely outcome will be a renegotiation of the conditions of Catalonia’s financial autonomy and that the property market in Barcelona city will soon recover to pre-referendum levels.
“In the sought-after coastal areas of Catalonia, such as Maresme, Sitges and the Costa Brava, we are having an exceptional last quarter, significantly up on the same period in 2016.”
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