Prime property sales in Spain’s key cities and sales in resort areas have been key drivers of Lucas Fox’s sales in the first half of 2018.
According to their latest market reports, prime sales increased by 27% year-on-year across the group. Meanwhile, key second home destinations such as Marbella, the Costa Brava and Ibiza all saw significant growth compared to the same period last year.
International buyers dominated sales in these coastal regions – 87% were foreign compared to 63% in the first six months of last year with the majority coming from the United Kingdom, France and Scandinavia. The main motivation for purchase was as a secondary residence (77%).
“This has been a record-breaking year for the Lucas Fox Costa Brava office,” explains Lucas Fox Costa Brava Partner Tom Maidment. “The volume of sales so far in 2018 has already exceeded our forecast for the whole year. Properties above €1.5 million and new homes are selling particularly well. Northern European buyers have been the most active with French and British buyers accounting for over 50% of all Lucas Fox sales transactions in the region. We are currently looking at a number of high-end projects in the area as demand for turnkey homes, particularly from foreign buyers, grows year by year.”
In the first six months of 2018 Lucas Fox Ibiza enjoyed one of its most successful periods in recent years, mainly due to the high volume of prime sales, all of which were to international buyers purchasing secondary residences.
In Marbella Lucas Fox sales increased by 50% and the average sales price went up to just over €1.2 million. Foreign buyers accounted for 83% of sales and, as with Ibiza, all bought second homes.
Madrid, Barcelona and Valencia sales
In the cities, Madrid and Valencia both saw increases in sales volume – up by 20% and 10% respectively – but there was a slight dip in sales in Barcelona due to the political issues in Catalonia. However, offers received for new homes in the first six months of 2018 more than doubled compared to those received in the first six months of 2017.
“The knock-on effect of the political situation in Spain meant we saw a temporary drop in demand for homes from international buyers,” explains Rod Jamieson, Lucas Fox’s Managing Director. “The situation has now stabilised and we are now registering as many enquiries for Barcelona property as we were this time last year. Transactions involving local buyers have remained constant throughout the period. Prices in the city have also readjusted in the last six months or so and buyers are seeing this as an opportunity in which to invest, given the positive forecasts of continued price rises. New homes continue to be in high demand particularly in central districts and along the beachfront – around a third of our Barcelona completed sales in the first half of the year were for these popular ‘lock and leave’ homes.”
The proportion of sales of Barcelona prime properties (above €900,000) in the first six months of 2018 (29%) increased compared to the proportion in the first six months of 2017 (16%), and the average sales price of a prime property went up from €1.3 million to €1.5 million (up by 17%), proving that this sector of the market is recovering well.
It has also been a good half-year for the Barcelona lettings department with rentals increasing by nearly 17% as the Catalan capital becomes increasingly popular among the start-up generation and tech-savvy entrepreneurs.
British buying despite Brexit
Meanwhile across the whole group, sales to British buyers were up on last year representing 13% of all sales and an increase of 23% year-on-year. In resort areas, British buyers represented the biggest buyer group – in Marbella, the British accounted for 33% of buyers, in Sitges 27%, the Costa Brava 25% and Ibiza 13%. The figures suggest that investors with more to spend are shifting money from the United Kingdom and acquiring European assets in anticipation of events to come when Brexit takes full effect. Buyer nationality in city locations continues to be more varied.
Data from property portal Idealista shows that prices at the end of the second quarter of 2018 rose by 23% in Madrid, by 15% in Valencia, by 3% in Barcelona, by 2% in Girona Province, by 12% in Málaga Province and by 2% in the Balearics, compared to the price at the end of second quarter of 2017. In Spain as a whole, prices rose by 7%. Meanwhile latest data from the Spanish Association of Notaries shows that the housing market grew by 7.7% to May 2018, the fifth year of expansion since the start of the recovery midway through 2014. The Notaries data also showed that mortgage lending was up 9%.