Demand for luxury real estate in Spain soars

Demand for luxury real estate in Spain soars

Luxury real estate in Spain has seen massive upticks in sales and prices over the last year, with the Balearic Islands and Andalusia the most sought-after regions. Prices have increased to an average of €7,600 per square metre and transactions have risen by 55%. Foreign investor demand lies behind the surge in this high-end sector.

Prime homes increasingly in demand

A recent report from the valuation company Grupo Tecnitasa reveals that Spanish luxury real estate market is experiencing a boom. Valuations of this type of property have sextupled over the last five years, while those for homes worth over €5 million have increased nine-fold.

As a result, sales and prices have both multiplied. The sector saw a 55% uptick in transactions in 2023, while luxury house prices have gone up by over 10% since 2021. The average square metre now stands at €7,660, although this figure rises to over €27,000 in the Balearics.

The sales figures contrast with other segments of the Spanish property market, where transactions fell slightly during 2023.

Preferred locations for luxury real estate in Spain

The Balearics, particularly the islands of Mallorca and Ibiza, stand out as the absolute favourites for high-end homes. Madrid, Catalonia (Barcelona and the Costa Brava) and the Costa del Sol follow at some distance.

According to the report, the Balearics and the Costa del Sol appeal as luxury home destinations because of their “security, strategic location, climate and communications”. While the islands have been a honeypot for prime residences for decades, other parts of Spain still have plenty of room for growth in this sector. The Costa del Sol is one example, as the increased demand in the area shows.

Preferred type of property

Detached homes make up the largest proportion of luxury real estate in Spain, taking 70% of the share. They average around 505 square metres in size and cost from €1 to over €12 million.

Apartments account for 22% of the market and average around 269 square metres. The most expensive cost over €5 million.

Despite the high price tags, experts claim that high-end property in Spain represents much better value than in other luxury destinations. They point out the sector’s competitiveness compared to markets such as London, Monaco or Paris.

Discerning buyers

As a result of Spain’s competitive prices, the luxury sector appeals particularly to foreign investors. Many are European from countries such as Germany, the UK, Sweden and Switzerland, although buyers from the Americas are increasingly present. Realtors report an ever-greater percentage of Mexicans, Venezuelans and North Americans among them.

Most purchasers are between 40 and 60 years old and tend to buy a holiday home to enjoy with their family and let for the remainder of the year. The majority are executives in their home countries.

In addition, luxury real estate in Spain attracts developers who refurb high-end homes to let or sell afterwards.

(Source: La Razón)