According to the Instituto de Valoraciones, the climate, the sustainability of brick construction and the introduction of golden visas are the reasons behind the growth of luxury housing in Spain.
After the pandemic, the real estate sector in Spain is recovering dynamically, and now it is registering even higher rates of house sales than it was before the pandemic. Indeed, according to the General Council of Notaries, there were 38,154 house sales transactions registered in August 2021, which is 12% more than in the same month of the previous year and 26% more than in 2019, when the sector was still not affected by the onset of the crisis due to the epidemic.
Private buyers and investors interested in luxury houses in major cities such as Madrid or Barcelona, islands and coastal areas have played a significant role in this recovery. In a time of crisis and uncertainty, it was expected that those potential investors with higher purchasing power would take advantage of the offer and ease of purchase for a profitable investment.
It has been seen to a large extent over the past year, given the changes in demand and household needs. Thus, more and more people want to change apartments for detached houses with their plot, garden and pool, spacious rooms and dedicated recreation areas. In the case of luxury housing, this is an increased demand for additional services and values such as a heated pool, enhanced security, automated house systems and even higher quality finishes and materials used.
Various studies have noted an increase in interest in luxury housing and the number of such transactions in recent months. The forecasts for this trend appear to be optimistic. However, what are the reasons for the high demand for this property? Instituto de Valoraciones analyzed the market to assess the state of affairs and highlight trends.
Spain is one of the most attractive destinations for foreigners looking for luxury real estate in prestigious areas of major cities, islands, and coastal areas. Easing restrictions on travel between countries and increased international mobility have boosted foreign investment in Spain, including an increase in demand in the luxury housing market from people with high purchasing power. We watch Europeans interested in a resort lifestyle (including good service, gastronomy, culture and leisure) in sunny destinations choose luxury properties located in beachfront enclaves such as the Mediterranean coast of Spain, the Canary Islands and the Balearic Islands.
Investing in real estate is still a safe investment, which has become even more evident in the last year, when the sector of “brick” construction, despite the effects of the pandemic, withstood and even recovered in a very dynamic way. The pandemic timeout has created opportunities for high-yield real estate selection. The luxury house market is booming, which means now is the time to invest before prices rise using the opportunities offered by the real estate market.
The boom in the market is accompanied by the emergence of a certain audience that is interested in luxury housing. These are young entrepreneurs, millennial entrepreneurs, founders of successful start-ups and generally successful people in the high-tech world who have high purchasing power and are interested in buying houses that meet certain quality standards and offer them exactly the amenities they are looking for. It is also important to note the new audience - young entrepreneurs or investors who are not European residents interested in a “golden” visa.