Lucas Fox Spanish Real Estate Market Reports 2017

Lucas Fox has released its Market Reports for 2017. These in-depth in-house reports include detailed information about the property landscape in the company’s 8 key regions – Barcelona, Maresme, Sitges, Madrid, Valencia, Costa Brava & Girona, Marbella-Costa del Sol, and Ibiza.

2017 saw Lucas Fox’s business continue to grow significantly with the number and value of sales transactions showing annual growth rates of 39% and 59% respectively. Overall the Spanish property market also continued to show steady signs of recovery with over 460,000 residential properties exchanging hands in 2017, according to the National Institute of Statistics, an increase of 15% over the number of properties sold in 2016. There is a continued high level of interest in New Development properties, with sales of new homes accounting for half of all Lucas Fox sales in both Madrid and Barcelona. However, demand still outweighs supply for this product.

National buyers accounted for 34% of all Lucas Fox sales in 2017, UK buyers accounted for 10% and US buyers 8%. The remaining buyers mainly came from other European countries.

Just over a third of Lucas Fox buyers purchased property as a secondary residence with the remainder mainly being split between those buying for a primary residence and those buying for investment purposes.

2017 was Spain’s fourth straight year of growth and job creation following the recession. Spain’s economy grew at almost double that of the Eurozone average (3.1%) and more than 600,000 new jobs were created. These figures have allowed Spain to recover to revenue levels enjoyed before the recession.

The International Monetary Fund has estimated that Spain will be among the most developed countries to grow fastest during 2018. In the medium term, government forecasts point to average growth of 2.5% until 2020, a reduction in the unemployment rate to 11% and attaining budgetary balance within 2 years.

Spain smashed all tourism records in 2017, welcoming 82 million visitors, according to the National Institute of Statistics, and overtaking the United States to become the second most visited country in the world last year whilst France retains the top spot.

Barcelona

• The number of sales transactions completed by Lucas Fox Barcelona in 2017 increased by 24% compared to 2016, with an average price of a home sold of €804,941. The total value of sales transactions in 2017 increased by 37% compared to 2016.
• National buyers accounted for 31% of all Lucas Fox Barcelona sales in 2017, US buyers accounted for 11% of all sales and UK buyers 10%. The remaining buyers were mainly split between other European countries and the Middle East.
• The majority of all Lucas Fox Barcelona buyers purchased property for investment purposes (39%). 29% bought as a primary residence and 22% as a secondary residence.
• Just under a quarter of Lucas Fox Barcelona buyers purchasing property in the mid-market range (between €450,000 and €900,000) bought homes for investment purposes, with majority of the remainder buying as a primary residence.
• In the prime market range (over €900,000), the majority of Lucas Fox Barcelona buyers purchased as a primary residence (39%), with those buying as a secondary residence accounting for almost 30% and those buying for investment purposes accounting for just over 20%.
• The number of rental transactions completed by Lucas Fox Barcelona in 2017 increased by 69% compared to 2016, with the price averaging at €2,554, slightly up on the average price in 2016.
• The trends at Lucas Fox reflect those of official figures. The number of sales transactions in Barcelona in 2017 increased by 13% over 2016, averaging 4,380 sales per month. (INE)
• The total value of property transactions in Barcelona for the first three quarters of 2017 grew by 31% over the amount of trading for the same period in 2016. (Spanish Department of Development)
• The number of mid-market sales transactions (between €450,001 and €900,000) in Barcelona in the first half of 2017 increased by 44% compared to the same period in 2016. (Spanish Department of Development)
• The number of prime market sales transactions (over €900,000) in Barcelona in the first half of 2017 increased by 47% compared to the same period in 2016. (Spanish Department of Development)
• The number of foreign buyers in Barcelona accounted for 9% of the total sales in the final quarter of 2017. (Registradores).
• The number of sales of new homes in Barcelona in 2017 increased by 19% over 2016, with sales of new homes making up 12% and 13% of the total sales in 2016 and 2017 respectively. (INE)
• Average property prices in Barcelona city showed an annual increase of 10% at the end of 2017, with prices in the Old Town, Eixample, Les Corts, Sant Martí and Sarrià-Sant Gervasi increasing by 9%, 8%, 9%, 1% and 8% respectively. (Idealista)
• Average rental prices in Barcelona city showed an annual decrease of 2% at the end of 2017, partly due to the recent political situation. Average prices in the Old Town, Eixample and Sarrià-Sant Gervasi also showed a decrease, by 5%, 4% and 2% respectively. However, average prices in the areas of Les Corts and Sant Martí increased by 3% and 7% respectively. (Idealista)
• 2017 was another strong year for passengers arriving at Barcelona-El Prat airport, with an annual increase of 7% over passenger arrivals in 2016. Over 47 million passengers arrived at Barcelona-El Prat airport in 2017. (Aena)
• International tourism in Catalonia continued to increase in 2017, growing by 6% over international visitor numbers in 2016. Catalonia hosted over 18 million international tourists in 2017. (INE)

“Lucas Fox Barcelona had another exceptional year for sales in 2017 with a 24% rise in transactions compared to 2016. The average sales price was also up significantly – from €726,000 in 2016 to €805,000 last year. This shows that, despite the political uncertainty from October to December, the demand for homes in Spain’s second city has continued to show steady growth.

Demand from international investors has been growing year-on year with foreign buyers – mainly from Northern Europe and the United States – now representing more than two thirds of Lucas Fox Barcelona sales. Half of all Lucas Fox Barcelona sales are now for new homes, which is in line with our forecasts, and interest in these turnkey products continues to grow from both national and international investors.

Numerous exciting New Developments are coming onto the market in 2018, which is expected to satiate at least some of this demand. The exponential growth in the Catalan capital has also presented alluring yield opportunities for investors compared to other regions in Spain.”

Rod Jamieson, Lucas Fox Head of Operations

“2017 started very strongly. Rent values continued to increase but as the political situation deteriorated sharply, towards September we started noticing a change in the rental values and amount of transactions from international clients.

The most popular areas continue to be Eixample Left and Right. At the start of the school year, demand for homes in the Zona Alta always picks up due to the location of international schools.”

Shirley Rhodes, Lucas Fox Head of Rentals

Maresme

• The number of sales transactions completed by Lucas Fox Maresme in 2017 increased by 27% compared to 2016, with an average price of €908,289. The total value of sales transactions in 2017 increased by 70% compared to 2016.
• National buyers accounted for almost a third of all Lucas Fox Maresme sales in 2017, with the remainder of buyers mainly coming from the United Kingdom, Asia, the United States and other parts of Europe.
• Almost 60% of Lucas Fox Maresme buyers in 2017 purchased property as a primary residence and just over 20% purchased as a secondary residence. The remainder of buyers largely bought for investment purposes.
• The number of sales transactions in the Maresme region in the first three quarters of 2017 increased by 20% compared to the same period in 2016. (Generalitat de Catalunya)
• Average property prices in the areas of Arenys de Mar, Arenys de Munt, El Masnou, Mataró, Premià de Mar, Sant Andreu de Llavaneres and Vilassar de Mar increased by 10%, 6%, 10%, 13%, 9%, 6% and 2% respectively. (Idealista)

“This has been a standout year for the Maresme residential property market with Lucas Fox sales activity up over 25% on 2016 figures. Movement has been strongest in the €450,000 to €700,000 price range and on prime market properties priced between €1.1 million to €2.8 million. Demand has focused predominantly on towns to the south of Mataró with Alella continuing to be the region’s most sought-after location.

The market continues to attract a diverse cross section of buyers with around a third coming from Spain, around 40% coming from Europe and the remainder from non-EU countries – predominantly the United States and China. We anticipate the market to continue on this upward trend into 2018 with marginal price increases in the prime areas of the southern end of the Maresme region.”

Tom Maidment, Partner Lucas Fox Maresme, Costa Brava & Girona

Sitges

• 2017 has been an exceptional year for Lucas Fox Sitges. The number of sales transactions increased by 144% compared to 2016, with an average price of €978,114. The total value of sales transactions in 2017 increased by 138% compared to 2016.
• Foreign buyers accounted for 86% of all Lucas Fox Sitges sales in 2017, with the majority coming from Europe including 10% from the United Kingdom.
• Almost half of all Lucas Fox Sitges buyers in 2017 purchased property as a secondary residence, with 32% buying as a primary residence.
• Average property prices in Sitges showed a very slight increase in 2017, with prices only rising by 1% since the end of 2016. Average property prices in the neighbouring areas of Castelldefels and Gavà, however, showed increases of 11% and 7% respectively. (Idealista)

“The Sitges office had an extremely successful 2017 with the great momentum at the start of the year continuing with significant sales from both lower budget properties and our exclusive high-end properties.

The most popular enquiries still tend to be for properties within walking distance of all amenities whether that be in Sitges itself or the nearby town of Sant Pere de Ribes. Detached villas in the hills overlooking Sitges with fabulous sea views are still in demand.

Buyers continue to be of a wide range of nationalities. British and French buyers tend to prefer second homes in the hills that they could also rent out to tourists in high season or if they are settling in Sitges, they prefer a property in the town and close to international schools and public transport. Our higher budget clients tend to be Northern European and our national clients (which are increasing) are enquiring about properties across the board but are generally looking for investment properties. We have seen increased demand from both national and international clients buying New Developments.”

Rachel Haslam, Director Lucas Fox Sitges

Madrid

• Lucas Fox Madrid had its most successful year to date in 2017. The number of sales transactions completed by Lucas Fox Madrid in 2017 increased by 92% compared to 2016, with an average price of €1.4 million. The total value of sales transactions in 2017 increased by 311% compared to 2016.
• National buyers accounted for 40% of all Lucas Fox Madrid sales in 2017. 28% of all buyers came from Latin America.
• Over half of all Lucas Fox Madrid buyers in 2017 purchased property as a secondary residence and 32% bought for investment purposes.
• According to official figures the number of sales transactions in the Community of Madrid in 2017 increased by 19% over 2016, averaging 5,850 sales per month. (INE)
• The total value of property transactions in the Community of Madrid for the first three quarters of 2017 grew by 29% over the amount of trading for the same period in 2016. (Spanish Department of Development)
• The number of prime market sales transactions (over €900,000) in the Community of Madrid in the first half of 2017 increased by 31% compared to the same period in 2016. (Spanish Department of Development)
• The number of foreign buyers in the Community of Madrid accounted for 6% of the total sales in the final quarter of 2017. (Registradores).
• The number of sales of new homes in the Community of Madrid in 2017 increased by 18% over 2016, with sales of new homes making up 23% of the total sales in both 2016 and 2017. (INE)
• Average property prices in Madrid city showed an annual increase of 12% at the end of 2017, with prices in the centre rising by 22%. The sought-after districts of Chamartín, Chamberí and Salamanca showed increases of 12%, 19% and 19% respectively. (Idealista)
• Average rental prices in Madrid city showed an annual increase of 8% at the end of 2017. (Idealista)
• The number of passengers arriving at Madrid-Barajas airport in 2017 showed an annual increase of 6% over passenger arrivals in 2016. Over 53 million passengers arrived at Madrid-Barajas airport in 2017. (Aena)
• International tourism in the Community Madrid continued to increase in 2017, growing by 16% over international visitor numbers in 2016.The Community of Madrid hosted almost 7 million international tourists in 2017. (INE)

“This year has seen much progress in the development of the property market in Madrid. With international demand growing from a diverse base of investors, whether Latin American, Middle Eastern, Asian or Northern European, all are looking to take advantage of the opportunities available in the third largest European capital.

Prime central locations such as Justicia, Salamanca and Chamberí continue to be most popular. In 2018 we expect to see increased availability of luxury new build projects offering apartments between €1.5 million and €3 million, which should help satisfy both domestic and international demand.

National demand has grown significantly in Madrid in 2017, thanks to positive economic conditions and the ready availability of financing. During the last quarter of the year Madrid also benefited from the increase in the flow of capital exiting Catalonia due the political and economic crisis.”

Rod Jamieson, Lucas Fox Head of Operations

Valencia

• The number of sales transactions completed by Lucas Fox Valencia in 2017 increased by 86% compared to 2016, with an average price of €396,383. The average price of a property sold by Lucas Fox in Valencia city itself was €461,635.
• National buyers accounted for over 60% of all Lucas Fox Valencia sales in 2017, with the majority of the remaining buyers coming from Europe.
• A third of Lucas Fox Valencia buyers in 2017 purchased property as a main home and a third purchased as a secondary residence, with the remainder buying for either investment or relocation purposes.
• The number of rental transactions completed by Lucas Fox Valencia in 2017 increased by 59% compared to 2016, with the price averaging at €2,304, slightly up on the average price in 2016.
• According to official figures, the number of sales transactions in Valencia in 2017 increased by 21% over 2016, averaging 2,226 sales per month. (INE)
• The total value of property transactions in Valencia for the first three quarters of 2017 grew by 22% (€2,057 million) over the amount of trading for the same period in 2016. (Spanish Department of Development)
• The number of foreign buyers in the Valencia accounted for 11% of the total sales in the final quarter of 2017. (Registradores).
• Average property prices in Valencia city showed an annual increase of 11% at the end of 2017, with prices in the sought-after districts of the Old Town, Eixample and El Pla del Real increasing by 13%, 15% and 9% respectively. (Idealista)
• Average rental prices in Valencia showed an annual increase of 9% at the end of 2017. (Idealista)
• 2017 was a strong year for passengers arriving at Valencia airport, with an annual increase of 16% over passenger arrivals in 2016. Over 6.7 million passengers arrived at Valencia airport in 2017. (Aena)
• International tourism in Valencia continued to increase in 2017, growing by 15% over international visitor numbers in 2016. The Valencian Community hosted almost 9 million international tourists in 2017. (INE)

“The Valencia property market is continuing to recover well as it has done since midway through 2014, and this is particularly the case for resale properties. It has been a fairly dramatic recovery overall – in 2017 around 10,000 properties were sold in Valencia.

The outlook for the Spanish economy during 2018 is looking good and so we can expect continued confidence within the property market. There will be more movement within the New Developments market both in Valencia and the outskirts.

We expect demand from international clients to continue particularly in areas such as Eixample, Ciutat Vella, Alameda, Ciencias and Patacona.

Prices for resale homes are recovering well thanks to the strong demand. This growth may be affected as more new homes come onto the market, which are being promoted at attractive prices. Price rises are most notable in prime areas of the city, which is forcing some buyers to look at other districts such as Extramurs, Cuatre Carreres and Cabañal.”

Juan Luis Herrero, Partner Lucas Fox Valencia

Costa Brava & Girona

• National buyers accounted for 36% of all Lucas Fox Costa Brava sales in 2017, French buyers 9% and US buyers 9%. The remaining buyers largely came from other European countries.
• The majority of Lucas Fox Costa Brava buyers in 2017 purchased property as a secondary residence.
• According to official figures the number of sales transactions in Girona in 2017 increased by 13% over 2016, averaging 851 sales per month. (INE)
• The total value of property transactions in Girona for the first three quarters of 2017 grew by 24% over the amount of trading for the same period in 2016. (Spanish Department of Development)
• The number of prime market sales transactions (over €900,000) in Girona in the first half of 2017 increased by 21% compared to the same period in 2016. (Spanish Department of Development)
• The number of foreign buyers in Girona (which covers the Costa Brava, an area traditionally popular with foreign buyers, especially those coming from the United Kingdom) accounted for 33% of the total sales in the final quarter of 2017. (Registradores)
• Average property prices in Girona showed an annual increase of 5% at the end of 2017. In the sought-after area of Palamós average prices increased by 7% and average prices in Girona city itself increased by 6%. (Idealista)

“Following another strong year in 2017, we predict a positive outlook for the market in Girona and the Costa Brava during 2018. The standout trends this past year have been the increased activity in the rustic sector and greater movement at the higher end of the market in prime coastal areas. The fall in the Pound as a result of ongoing Brexit negotiations has reduced the purchasing power of British clients and whilst there is still significant interest from UK buyers, the number of transactions has dropped off substantially on previous years.

Sales of country properties have increased significantly on previous years. We expect this trend to continue into 2018 as prime market demand from local buyers continues to grow – accounting for over 50% of Lucas Fox sales in the region in 2017 – and demand from international buyers (predominantly European) remains strong.”

Tom Maidment, Partner Lucas Fox Maresme, Costa Brava & Girona

Marbella-Costa del Sol

• A phenomenal year for Lucas Fox Marbella with the number of sales transactions completed in 2017 increasing by 233% compared to 2016, and an average price of €674,040, an increase of 34% over the average price in 2016.
• Foreign buyers accounted for all of Lucas Fox Marbella sales in 2017, with 70% coming from Scandinavia and the remainder being split between the United Kingdom, the United States and the Middle East.
• 80% of all Lucas Fox Marbella buyers in 2017 purchased property as a secondary residence with the remainder buying as a primary residence.
• According to official figures the number of sales transactions in Málaga in 2017 increased by 13% over 2016, averaging 2,505 sales per month. (INE)
• The total value of property transactions in Málaga for the first three quarters of 2017 grew by 17% over the amount of trading for the same period in 2016. (Spanish Department of Development)
• The number of prime market sales transactions (over €900,000) in Málaga in the first half of 2017 increased by 28% compared to the same period in 2016. (Spanish Department of Development)
• The number of foreign buyers in Málaga accounted for 32% of the total sales in the final quarter of 2017. (Registradores).
• Average property prices in Málaga showed an annual increase of 11% at the end of 2017, with prices in Benahavís, Estepona and Marbella increasing by 6%, 13% and 12% respectively. (Idealista)
• Average rental prices in Málaga showed an annual increase of 15% at the end of 2017. (Idealista)
• 2017 was a strong year for passengers arriving at Málaga-Costa del Sol airport, with an annual increase of 14% over passenger arrivals in 2016. 18 million passengers arrived at Málaga-Costa del Sol airport in 2017. (Aena)

“British clients are starting to buy again and if Brexit ends up being a ‘soft Brexit’, that is likely to have a positive impact on the property market on the Costa del Sol. Scandinavians continue to be the most predominant buyers and are increasingly looking to relocate. There has also been a big increase in the numbers of off-plan projects available on the Costa del Sol and most seem to be selling well.

Prices seem to be competitive compared with resale properties particularly when factoring in new build quality and design. Increased competition is leading to some more aggressive sales techniques and in some cases homes are selling well before a licence has been granted, so it is now increasingly important to use the services of an unbiased and independent broker to identify the best projects and also protect buyers from unscrupulous developers.”

Stephen Lahiri, Partner Lucas Fox Marbella

Ibiza

• Foreign buyers accounted for all of Lucas Fox Ibiza sales in 2017, with a quarter coming from the United Kingdom, a quarter from France and the remainder from other European countries.
• Three quarters of Lucas Fox Ibiza buyers in 2017 purchased as a secondary residence with the remainder buying as a primary residence.
• According to official figures the number of sales transactions in the Balearic Islands in 2017 increased by 15% over 2016, averaging 1,326 sales per month. (INE)
• The total value of property transactions in the Balearic Islands for the first three quarters of 2017 grew by 22% over the amount of trading for the same period in 2016. (Spanish Department of Development)
• The number of prime market sales transactions (over €900,000) in the Balearic Islands in the first half of 2017 increased by 10% compared to the same period in 2016. (Spanish Department of Development)
• The number of foreign buyers in the Balearic Islands accounted for 35% of the total sales in the final quarter of 2017. (Registradores)
• Average property prices in Ibiza Town, Sant Josep de sa Talaia and Santa Eulària des Riu increased by 51%, 11% and 18% respectively. (Idealista)
• The number of passengers arriving at Ibiza airport in 2017 showed an annual increase of 4% over passenger arrivals in 2016. Almost 8 million passengers arrived at Ibiza airport in 2017. (Aena)

“Ibiza continues to be a highly sought-after destination in the Mediterranean, with luxury property in short supply compared to the level of demand.

During 2018, various important decisions will be made by the local Ibizan government that could positively affect the property market. March is the deadline for the planning department of Ibiza Town to decide about the urban planning rules and regulations that could open up many development opportunities. Rustic land, however, remains very restricted, and so we can expect the usual illegality issues to deal with when buying a resale home.

There are several New Development projects in the pipeline set to hit the market in 2018, in both the mid and upper end of the markets. This should satisfy some of the demand for homes in luxury gated communities with concierge services.

The acquirement of rental licences that was blocked earlier this year should also have a newly established protocol by the summer of 2018. This should also influence property investment in an upward direction, as the rules become clearer.”

Rod Jamieson, Lucas Fox Head of Operations

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