The Spanish prime property market is back in business. First quarterly results from luxury real estate agency Lucas Fox suggest an encouraging outlook for the sector, with the average price of a property sold by the company increasing by 18% year-on-year to €924,000, up from €780,000.
The regions where homes sold at the highest prices were the popular coastal resorts of Sitges and Marbella, with sales averaging around the €1.4 million mark, followed by the Costa Brava and the Province of Girona where the average sale was slightly over €1 million.
Prime sales (properties valued at over €900,000) in Marbella and the Costa Brava represented 67% and 50% respectively of each region’s total sales in the first quarter of the year.
Lucas Fox Costa Brava also saw the greatest growth in both sales volume and value across the group, more than quadrupling year-on-year to the end of March 2018.
“We saw a tremendous year-on-year increase in sales in the Girona and Costa Brava region during this first quarter of 2018,” comments Tom Maidment, Director of Lucas Fox Prime.
“International second home buyers have been the most active with notable increases in the numbers of UK buyers returning to the market – accounting for 50% of our sales in the region and 75% of our prime property transactions in the first quarter. Confidence in the market and the Spanish economy is at its highest for some time and buyer concerns over Catalan independence have now all but disappeared. This is attracting high-end lifestyle investors to the market in ever greater numbers, which was further underlined last week as we closed one of the region’s largest residential sales transactions for many years. Spain’s GDP growth is projected to grow by 2.2% in 2018, surpassing the growth forecast in Germany, France and the UK. Higher employment, rising disposable incomes and stronger consumer confidence are all facilitatory to property market growth,” adds Maidment.
According to official data, in 2017 just over 61,000 homes were sold to foreigners, representing just over 13% of total sales, a figure not far off the peak of 2007 when around 65,300 homes were sold to foreigners, then representing 8.3% of the market.
Last year the British accounted for the greatest proportion of foreign buyers in Spain, comprising 15% of foreign purchases, followed by the French (8.6%), and Germans (7.8%).
Lucas Fox’s sales in the first quarter were dominated by foreigners who accounted for 77% of sales, the majority of them coming from the United Kingdom, France, the United States and Scandinavia.
Property prices have been steadily rising over the past two years thanks to an increase in demand from international buyers. According to Idealista, average property prices across Spain grew at just over 7% year-on-year to Q1 2018, the second highest level since the start of the recovery.
According to Rachel Haslam, Director of Lucas Fox Sitges, the influx of foreign buyers is in part down to a growing demographic of savvy younger buyers who are purchasing for both investment and lifestyle.
“We’re seeing many fewer retirees and more CEOs, entrepreneurs and self-employed who want the flexibility to work from home,” explains Haslam. “The age range of our typical buyer has come right down in the last 5 years or so – they tend to be aged between 35 and 55, looking either for investment opportunities or for a lifestyle relocation, a trend which I see continuing for many years to come.”
In Valencia the average age of a buyer during 2017 was just over 48 and professions ranged from CEO, business owners and financiers to architects, pilots and medics as well as some retirees.
The recent growth in high-end sales has lead to an expansion of Lucas Fox’s elite sales division Lucas Fox Prime, targeting buyers and sellers of some of Spain’s most exclusive and desirable homes.