Prices in the luxury property market have boosted the real estate industry towards recovery. After a relatively stable few years, we are now seeing a time of revaluation and customers interested in the high profitability on offer.
According to the Bank of Spain, foreign property investment increased by 16% in 2013 (6.453m euros) compared to the year before. That means a sustained increase which is led by the “premium” areas of the country.
The luxury property market has become the best Spanish investment. Whether for personal use or as a property to let, its profitability is surpassing both bank deposits and public debt.
Now it’s buyers from the north and east of Europe, Asia and America who are looking for these exclusive properties with a secure capital investment which have hardly even noticed the effects of six years of recession.
Luxury Trends
For some reason, the luxury sector has been the one to undergo the greatest increase in prices since 2008. This is a trend which will be accentuated in the future thanks to the growing quantity of international buyers interested in the luxury property market.
For that reason, the demand of foreign customers for luxury properties has increased along with their prices in 2014 and also did so throughout 2013.
And it isn’t just buyers who are reaping the rewards. High-end properties are a scarce commodity in the majority of major European cities. High demand combined with lacking supply has provoked a rise in prices of luxury villas and apartments in cities such as Barcelona.
Reasons for the success of exclusive products
The approval of the Law 14/2013 supporting Entrepreneurship and Internationalisation was a deciding moment in the revival of the luxury property market. The new deal giving residence permits in return for investments of quantities over 500,000 euros prompted an increase of around 20% in this type of transaction.
However, there are other reasons which are deciding factors when it comes to luxury property. Many buyers want to enjoy their property all year. Having a property by the sea and just a few hours’ flight from home often tips the balance.
Along with good location, quality, facilities and a secure and peaceful environment also play a role. All this makes an investor who previously would have avoided the property business now feel attracted by competitive prices, high profitability and an excellent quality of life.
Exclusive areas of interest
For buyers, Barcelona is one of the favoured areas and that’s for many reasons. There are many Chinese customers among buyers in the Catalan capital, often looking for flats of some 100m2 and they can enjoy more than just this city; with the Visa Gold, they can explore the entirety of the Schengen zone.
As opposed to housing bubbles such as those seen in various Chinese cities, Barcelona offers great quality at a reasonable price. For that reason, Asian investors consider it the sector with the highest growth, according to Real Capital Analytics (RCA).
Another active group of investors is the Russians. These are usually successful businessmen with high purchasing power in search of more expensive and larger properties, often up to 300m2. Top residential complexes such as those found in places like the Costa Daurada or the Costa Brava are usually favourites.
Improvements have also been substantial on the Catalan coast relative to 2013, and that growth is also thanks to international investors.
However, it’s not only Chinese and Russian citizens who buy luxury properties in Catalonia. Customers from France, Great Britain, Germany and the USA also come to stay.
Whether in the city of Barcelona or in the best parts of the Costa Brava and the Costa Daurada, the luxury property market is a much-appreciated among big investors – an opportunity not to be missed.
