The Spanish prime residential property market shows encouraging trends as confidence returns, the economy continues to grow and mortgages are more readily available, according to the latest market reports from Lucas Fox International Properties.
The latest half-yearly market reports from Spanish independent real estate agency Lucas Fox International Properties show steadily rising property prices as well as an increase in both the volume and value of transactions in Spain’s key cities and desirable coastal regions.
The combination of attractive property prices – which in some regions are still around 30 to 35% below the peak of 2006 – and low interest rates have helped contribute to create ideal market conditions for investors, the report says.
Prices rose by an average of 4% in Barcelona city, 6% in Madrid and Marbella and almost 8% in Valencia. Prime urban areas – such as Barcelona’s Eixample district – saw prices rise as much as 10% year-on-year.
The number of completed sales across all Lucas Fox regions increased by 40% and in Barcelona by 50% in the 12 months to June 2016. The average transaction value of Lucas Fox sales went up by 5%.
Significantly, sales of new homes have soared in the last year. In Barcelona alone, Lucas Fox registered a 55% increase in the number of sales of ‘turnkey’ properties year-on-year, accounting for more than 40% of the company’s sales.
Thanks to increased planning approvals in Barcelona during 2016, our New Development portfolio has grown significantly. It currently consists of more than 280 million Euros of property which will provide more than 300 homes within the next 18 months, and a further 1,000 homes with the value of 650 million Euros planned for the next 3 years. With tourism data set for yet another record-breaking year, we expect that Spain’s second-home destinations will continue to attract demand for this kind of product from both foreign and national investors.
Alexander Vaughan – Lucas Fox co-founder
The report also suggests that foreign investors continue to be key drivers of the prime residential market but national buyers are also sustaining the turnaround. Spanish buyers accounted for 30% of all Lucas Fox sales in the first six months of 2016, up from 17% in the same period last year. The UK represented 10% of Lucas Fox sales with the rest of Europe (mainly France and Scandinavia) accounting for 30% of sales. The number of buyers from the Middle East is also rising, representing 8% of all Lucas Fox sales, compared to 4% in the same period during 2015.
With regards to motivation for buying, 28% of Lucas Fox clients bought homes as a primary residence and 37% as a secondary residence. There has been a significant rise in those buying for investment – 28% in the first six months of 2016, compared to 17% in the same period in 2015. 6% also bought property to obtain the ‘Golden Visa’ – up from 3% compared to the same period in 2015.