The luxury real estate sector in Spain began to actively recover after the most difficult months of the COVID-19 pandemic in 2020. But there was a really sharp increase in the number of transactions in 2021.
It also became known that foreigners account for a significant share of premium home purchases in Spain — 16.3% of the total. The Balearic and Canary Islands have a higher share, with 43.5% and 31.6%, respectively.
These data were obtained from the VIVA Sotheby's International Realty report.
According to the share of foreigners in consumer demand for luxury homes, the most popular archipelagos are the Valencian Community, Andalusia, Catalonia and Madrid.
In Spain, the upward trend in prices continues. On average, prices for luxury housing increased by 4.3% in 2021. The largest price increases were in Galicia, Andalusia, Madrid, the Balearic Islands, and Baskonia.
However, the average cost of residential real estate in the Balearic Islands was again leading. The average price of housing on the islands was 410,100 euros. Madrid ranked second.
It is worth considering the primary and secondary markets. Sales of luxury real estate in the segment of new buildings increased by 30.3% year-on-year. The secondary market showed an annual increase in sales by 33.5%.
Alejandra Vanoli, CEO of VIVA Sotheby's International Realty points out: "After strong recovery growth, high market demand and a record year in many indicators, we expect positive trends to continue, albeit in a more restrained, stable manner. If we talk about the country's emerging markets, we should pay attention to Alicante — a paradise for new projects in a unique region."
New trends
In recent months, several new trends have appeared in the luxury real estate market in Spain, for example, buying real estate for renovation.
Although the amount of free land is rapidly decreasing, the number of protected areas is increasing, and prices for building materials are rising, many investors and buyers prefer to focus their attention on the secondary market. They acquire old properties and renovate them to modern standards. It is cheaper to save money, but it brings significant income.
Another market trend is a new customer profile: Millennials and Generation X. They are actively replenishing the market's customer base, and their share is higher than the people over 40 years old.
For example, in Madrid and Ibiza, buyers aged 25-34 years are the most numerous category of customers using the Internet to choose premium properties.