Break in the house? The ‘prime’ apartments maintain the pace of purchase in the sector
The purchase of luxury homes is growing by leaps and bounds in Spain. These are flats with prime features, that are in strategic areas and that large investors -both national and international- look for them for their exclusivity. Despite the economic uncertainty that is currently experienced globally due to rising rates or inflation, there are those who are looking for a difference in their real estate assets and launch themselves to invest in this type of housing. During 2022 Real estate transactions of more than 3 million euros increased by 55% compared to 2021, and experts expect this year to continue to rise.
The I Report on the Luxury Housing Market in Spain commissioned by the international real estate consultancy, hiscoxCatella assures that This figure doubles those reached in 2019 and indicates that the luxury segment accounts for just over 5% of the total Spanish residential market. “They are mainly fund operations that are willing to pay more money because the analysis they do is that they are unique pieces,” the associate of the Spanish Association of Real Estate Personal Shopper (AEPSI) assures La Información. Montse Moreno.
These exclusive properties range from a penthouse in the heart of the city to flats on the seafront, and the prices will depend on their characteristics but can exceed 40 million euros. “What they are looking for is exclusivity. They are different and special pieces, that make them willing to pay such an amount of money for it”, indicates Moreno. In addition, the expert adds that those who decide to invest in this type of housing do so for various reasons, but some have also used it as an investment to be able to retire, or it has even generated a high level of population displacement. with the arrival of Ukrainian investors who took refuge in Spain because of the war. Other investors look for ‘top’ apartments on the country’s coast and others pay large amounts for the longed for ‘golden visa’.
But it’s not just about shopping. The ‘prime’ rental market‘ is also attracting the attention of users. Industry sources have told this newspaper that both prime and sustainable real estate They are the most sought after by investors and tenants, but for this they mainly seek to be located in strategic areas so that there is greater future profitability. According to the ‘Prime Residential’ index published by savillsthe premium rental price in the main cities of the world it increased by 5.9% on average in 2022.
This same document settles the luxury segment is on the rise in different countries. In particular, it ranks the United States (Miami) and the United Arab Emirates (Dubai), which they had an increase in the sale price of prime housing of 25.4% and 12.5% respectively. In the case of Spain, it stands out Madrid with a sales price increase in 2022 of 2.2%and variation in the prime rental price of 4.6%. “The solid structure of the ‘prime’ residential market, added to the lack of supply in this market, will keep prices rising slightly, although the forecast is for a slowdown in the increase in luxury home sales prices, which will be around 0.5% in 2023”.
At a European level, the real estate consultancy Savills ensures that London moves at a high rate in terms of prime housing. The acquisition of these properties exceeded 70% of the total purchases in the real estate sector between the months of January and May of this year, increasing more than 11 points than in the same period last year. In Spain, the trend is expected to continue upward, and experts see this as possible because “whenever an investor has the desire and money, he will make a great investment if he sees that the country is attractive and offers great conditions.” The Hiscox report places Spain as the fourth most attractive country in the world for foreign investment in real estate that exceeds 3 million eurosbeing surpassed by the US, UK, and Australia.
“The quality of life that Spain sells makes its real estate products attractive”, indicates Moreno. The vast majority of properties of this type are in Malaga, Balearic Islands, Madrid and Barcelona (in 85%). In particular, the Andalusian capital leads this market with a total of 2,500 luxury homes worth more than 3 million euros, representing 34% of the total national market. On the other hand, the hotel segment is not left out: the luxury sector accounts for up to 52% of hotel investment in the first semester and Of the 1,383 million euros invested in Spain between January and June, 717 million corresponded to the luxury hotel sector.
The construction of luxury housing skyrockets in Madrid
Just a few months ago, the green light was given to the project that seeks to build 325 luxury apartments in Hortaleza with a total area of 63,518 square meters.
The urbanization of this project is not the only one that seeks to fill the capital with luxury. There are projects from developers such as Metrovacesa, or CooperOpen that are building homes in the heart of the capital for around 600,000 euros and up.