Noticias de la Cámara
Madrid property investors represent two thirds of luxury market | Lucas Fox
16/10/2017
Madrid is continuing its rise as a key European property investment hub, according to leading luxury real estate agency Lucas Fox, which has seen its sales in the Spanish capital increase by 30% and its total sales value rise by 170% in the year to the end of June 2017.
According to the company’s latest Market Reports for Q1 and Q2 2017, the profile of Madrid buyers is also beginning to change: the number of US and UK enquiries is increasing significantly – up 108% and 57%, Latin American buyers now account for nearly a third (31%) of all Lucas Fox sales, up from 11% whilst just under half (46%) were Spanish buyers. With regards to motivation for buying, just under two thirds (62%) of Madrid buyers purchased for investment reasons with the remainder (38%) buying as a second residence.
Last year, the ‘Real Estate Market Trends in Europe’ report, produced by PwC and the Urban Land Institute put Madrid as the 4th best city in continental Europe for property investment after Berlin, Dublin and Hamburg.
“The Madrid market this year has continued to follow a similar trend to 2016 with strong local and national market activity growth and increasing demand from international investors” comments Rod Jamieson, Director of Lucas Fox Madrid “We have seen sales transactions increase by nearly a third compared to last year and we expect them to increase fivefold by the end of the year. More and more international buyers are choosing the Spanish capital as the best option in which to invest their money, thanks to high potential for capital gains in the mid to long-term, excellent rental returns and the superb lifestyle on offer.”
The National Institute of Statistics shows a 15% rise in Madrid sales in the year to June 2017 compared to the same period in 2016 and transaction numbers are now only 9% below the peak of 2007. Significantly, the volume of sales for Madrid’s prime residential market (homes with a value of above €900,000) showed an annual growth of 27% in 2016, according to the Spanish Department of Development, mainly due to increasing international interest.
Across Madrid, prices at the end of June 2017 showed an increase of 6% compared to the end of June 2016, but in ultra prime areas such as Salamanca and Chamberí, where demand is higher, prices have increased significantly – up by 10% and 14% respectively, according to the property portal Idealista.
“Compared to most Northern European cities, property in Madrid still offers good value for money” adds Mr Jamieson “But like Spain as a whole, the city has a 2-speed market. In some areas prices have only recently levelled out but in highly desirable areas where demand is high, there have been notable increases. However, we do not believe that the recent price adjustments are anything to fear – they are simply appropriate to current market conditions. In 2017 we are looking at a different set of circumstances compared to ten years ago – the construction industry represents a much lower proportion of Spain’s GDP, there’s more control of risk indicators and overall, investors are much better informed. I believe that those predicting that another boom and bust are wrong to do so.”
Sales of new homes by Lucas Fox’s Madrid office represented 38% of all their sales in the first half of 2017 and the company believes that these turnkey projects will continue to drive the market – particularly in the cities – in the months and years to come. Lucas Fox Madrid will soon be commercialising a building of 27 luxury apartments and penthouses in Paseo de General Martínez Campos 19 in central Madrid and already has a sizeable waiting list of potential buyers. Lucas Fox will also be looking to expand its operations in Madrid in 2018 and beyond, doubling its staff and covering new areas of the city as well as in desirable zones on the outskirts such as La Moraleja and Pozuelo.
