The luxury housing market in Spain continues to experience a "boom" of growth. This process began at the end of 2021 and was consolidated in 2022. This year, experts point out that the situation will not change and even large growth rates can be expected.
The fact is that the profile of a typical buyer of luxury housing has completely different characteristics than the profile of an ordinary market participant. It is more resistant to shocks and exceptionally solvent. But besides that, a number of other factors affect the growth of this elite market.
One of these factors is the growth in the volume of purchases made by foreigners. According to the Association of Real Estate Inspectors of Spain, in 2022, 45% of all sales came from foreign buyers who made 88,800 transactions for the purchase of real estate. Transactions with foreigners are more expensive, about 9,000 transactions were made at prices above 500,000 euros.
Due to the high demand, which accounts for a rather modest supply, over the past year, prices for luxury apartments have increased by 4.8%, reaching 7,135 euros per square meter, according to data from the real estate company Idealista. And this growth does not repel foreigners. They can afford such expenses.
What is this category of clients looking for when buying real estate? In what cities do they buy the most? Do they depend on the mortgage market and how are they changing the luxury housing market? You can refer to Bruno Rabassa, CEO of the real estate company Berkshire Hathaway Home services Spain, working in the luxury real estate segment.
Rabassa points out that the elite market is not only much more stable due to solvent buyers, but it is also practically independent of the availability of loans. Investors and buyers from abroad rarely use borrowed funds for purchases, they are indifferent to the movements of lending rates.
For them, luxury real estate is, in many ways, a way to put their own savings into a "piggy bank". In addition, foreign buyers usually have large and diversified portfolios of assets hedged against crises. Therefore, it is rare to expect that when the situation worsens, these people will suddenly lose money and leave the market.