Guide: Real Estate in Spain
We hear from the experts who shed light on the upswing in the Spanish luxury property section and the factors that are propelling it forward.
Guide: Real Estate in Spain
There are strong signs of what could potentially be a spectacular turnaround for Spanish real estate as homebuyers have faith in the market – a renewed confidence. Even with Brexit’s uncertainty, the country’s prime market now attracts a broader mix of buyers, with investors taking advantage of the recent surge in tourist numbers.
Spain’s GDP growth is forecast to hit 2.6 per cent this year, surpassing Germany, Canada and the United States, according to IMF. Coupled by rising disposable incomes and an upswing in consumer confidence, this has helped boost the housing demand where mortgage lending up was up 20.2 per cent in March 2017 compared to the previous year (as quoted in a Knight Frank report).
Other positive indicators were reported by Global Property Guide where it cited: “Spanish house prices increased 3.6 per cent during the year to January 2018 (3 per cent inflation-adjusted) to €1,410 per square metre (sqm), a sharp improvement from a meagre growth of 0.96 per cent (-1.92 per cent inflation-adjusted) during the same period last year.
There are also plans for the Spanish government to revisit projects such as the Tren de La Costa (coastal train) in Costa Blanca, proposals for part of the tram network to be modernised, and improvements to existing single line rail routes.
Alexander Vaughan, co-founder of International Real Estate Agency, Lucas Fox agrees that “a fast-growing economy, falling unemployment, an increase in bank lending and a re-adjustment of property prices have combined to create unique buying conditions for oversea investors in Spanish property.”
Up on the cards in Spain’s luxury property market due in Q3 2018 is 14 contemporary-style 5-bedroom luxury villas in La Alqueria, Benahavis, Marbella, Spain. This gated community is built on an elevated plot with enviable vistas of countryside, Mediterranean Sea and nearby golf courses.
The charming Benahavis village and Estepona town as well as Puerto Banus and Marbella are all a stone’s throw away. In actuality, this plush development offers three different types of 5-bedroom villa designs where the best quality materials and environment friendly technologies are utilised. More interestingly, each villa will feature salt water swimming pools, terrace areas and manicured gardens.
Vaughan adds, “We are seeing a huge growth in what we call “Lifestyle Investors. They want to make a wise property investment (and) choose Spain because of the quality of life it offers.”
“As we have been saying for the last couple of years, the key for investors in Spanish property is to focus on location. The prices of properties in prime areas will recover first and now is a great time to take advantage of low prices and buy in the best micro-location you can for your budget.”
In fact, the increase in airport arrivals over the past 10 years means that Barcelona, Malaga and Valencia are still consistently popular with tourists looking for short-term property rental. This has led to many investors seeing the potential of buying a property to let as rental prices are gradually heading north.
Ibiza – a party-goers’ paradise – is also witnessing record breaking visitorship – it is set to break 8 million (as reported by Aena SME, a state-owned company that manages general interest airports and heliports in Spain).
The Association of Property Registrars in the Balearics has reported a tripling in the number of foreign-bought homes and it is the luxury end of the market that is attracting keen interest, with 15 per cent of purchases topping €500,000 (US$564,000). Unlike mid-market purchases, prime market properties are being purchased for either long term investment or for use as holiday homes.
Another popular area, Marbella has seen a growing interest amongst Middle East royalty and affluent US and Chinese buyers. It seems buyers are attracted to the year-round outdoor lifestyle, high quality services, vibrant restaurant scene, solid infrastructure and good international schools. In particular Marbella’s Golden Mile, including developments such as Nueva Andalucia, Sierra Blanca and Benhavis, is so popular that demand for property is outstripping supply.
The exclusive new development in the popular “Golden Mile” area of Marbella will offer 3- and 4-bedroom luxury apartments and 4- and 5-bedroom penthouses, all within a few minutes of the exclusive marina of Puerto Banus.
Text by Joanne Pasquale and Kate Everett-Allen | Additional reporting by Joe Lim
This article was originally published in the 2015 issue of Palace and updated on April 23, 2018.