Published 20/08/2014 by Carrie Frais

Continued signs of recovery in the Spanish luxury property market as international buyers continue to dominate

Property prices in Spain’s luxury sector have continued to remain steady over the past 6 months, according to the latest figures from Barcelona-based Real Estate Agency Lucas Fox’s half-yearly market analysis.

The number of transactions is increasing across all its regions as the gap between asking and sales prices continues to narrow. International clients account for around 90% of all Lucas Fox sales, with interest from Far East and Middle East investors continuing to gain momentum. Following a slight dip in numbers over the past few years, Northern Europeans have returned in to the market, thanks to low prices and attractive investment opportunities.

Significant findings in key Lucas Fox regions for Q1 and Q2 2014

Barcelona

  • There has been a steady upswing in sales in the first two quarters of 2014 compared to the same period last year
- Northern Europe and UK buyers are still dominant but with increased interest from non-European investors, particularly from the Middle East and Far East.
  • The Lucas Fox Barcelona office is currently generating approximately 30 offers per month, with approximately two out of every three being converted into sales.
  • Prime property sales price averages ended the second quarter of 2014 on €4,237/m², slightly up on 2013
.

The Barcelona market has continued to improve in the first two quarters of 2014 and there is a great deal more confidence amongst buyers, in particular international buyers. It looks like prices have now stabilized and the number of transactions is slowly increasing. The big change is that sellers are being more realistic and that asking prices have come down in line with buyer expectations.

Alexander Vaughan, Lucas Fox co-founder

Lucas Fox’s top 5 investor property hotspots for Barcelona

Ibiza

  • The Ibiza residential market is continuing to perform strongly, with an increased number of transactions compared to the same time in 2013.
  • Prices of premium properties in some prime areas are beginning to increase as demand outstrips supply.
  • Interest in prime market properties on Ibiza primarily comes from the UK and northern European buyers. Interest from US buyers has doubled in the past year.

The continued appeal of Ibiza is most definitely its unique lifestyle. More people are choosing to relocate to the island due to good schools (including international schools), outstanding properties and the exceptional quality of life. The island now offers 4G internet and better flight connections year round. Interest from Europeans is still high but demand has significantly increased from the Asian market, mainly Korean and Chinese buyers. There has also been a rise in interest from American investors.

Amanda Martí, Director Lucas Fox Ibiza

Lucas Fox’s top 5 investor hotspots for Ibiza

Costa Brava

  • – There has been significantly more movement in the property market in the opening two quarters of 2014 compared with the same period at any time since before the beginning of the crisis in 2006/7.
  • – Most buyers are lifestyle investors taking advantage of market conditions and purchasing second homes with a medium to long-term view on the market.
  • – Northern European buyers continue to dominate.
  • – In the last 6 months, there was been a drop in the number of Russian and Ukranian investors due to the devaluation of the Rouble but there are signs that these investors are returning to the market.

The recovery continues to gain traction in the Costa Brava with an increase in sales activity over the same period in 2013. The market is still almost exclusively driven by international investment, predominantly private investors from northern and eastern Europe attracted by the increasingly competitive property prices in prime coastal areas.

Tom Maidment, Director Lucas Fox Costa Brava

Lucas Fox’s top 5 investor hotspots for the Costa Brava

Marbella

  • With prices down to by up to 50% since the peak in 2007, there are some attractive opportunities around as the gap between sales and asking prices narrows.
  • British clients still remain the biggest group of buyers in the Marbella region, accompanied by Scandinavians, Northern Europeans and Russians. There has also been a significant rise in interest from US investors.
  • Many projects which were in the hands of the banks have now been purchased by investment funds at significantly discounted prices and will be released back onto the market over the next 6 to 18 months.

The positive trend of steadily increasing numbers of property transactions that started in the latter part of 2012 has continued during the first half of 2014. Most of the transactions are still focused on prime locations such as near to Marbella, Puerto Banús and close to the beach.

Stephen Lahiri, Director Lucas Fox Marbella

Lucas Fox’s top 5 investor hotspots for Marbella

Mallorca

  • Sales on Mallorca are up compared to the same period last year, with sellers more open to negotiate asking prices.
  • UK buyers continue to dominate, along with German, Dutch, Swiss and Scandinavian investors. There’s also been a rise in interest from South American buyers.
  • There is currently more demand for commercial property, with many investors searching for boutique hotel projects in Palma but also in Sóller, Pollensa and Artà.

We are experiencing an increase in demand for small country houses. Many buyers and investors purchase property with the intention of renting their detached country houses in the holiday rental market. Summer villas in developed areas in South West Mallorca are also selling well: mostly between €1.5 million and €2.5 million.

Rafael Calparsoro, Director Lucas Fox Mallorca

Lucas Fox’s top 5 investor hotspots for Mallorca

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