In Europe, Spanish real estate has become more and more in demand and valued. Hence, market prices have not ceased to increase. According to a study carried out in 2018 by the Instituto de Valoraciones, regarding premium housing, Spain comes second in Europe, only after Scotland, where exclusive property prices have risen most. Some weeks ago, we wrote an article about the issue of the constant increase of luxury property in Spain. We mentioned that Madrid is one of the top 10 favourite destinations of all the world in which to invest in luxurious property. According to the Instituto de Valoraciones report, property located in the main cities as well as housing on the coast have boosted this great demand of high standard real estate. The key to understanding this huge demand of luxury housing in Spain is in the arrival of new Spanish and foreign investors. But let´s focus on Madrid and on the price increase of luxury property in recent months. We will write about it in the blog of Estate One.

TWO FACTORS WHICH HAVE LED TO A PRICE INCREASE

According to the Instituto de Valoraciones report, Madrid took a leading role in luxury housing price increase in the last term of 2018. Prices rose a year-on-year average of 10% regarding property above 15.000€ per square metre. If we focus on the centre of the city, then we notice that in some cases this price increase was multiplied by five because in some areas it rose up to 50%. These facts and figures are very significant especially if we compare them with those of 2013, only six years ago. In those days prices dropped 13% regarding sales of top-level property. Many real estate experts point out that there are two important factors which have led to the revival of luxury real estate in Spain. On the one hand, international investors have arrived on the scene, and have thus revived the market. Some weeks ago, we wrote about Latin-American investors with high purchasing power who are buying luxury property in Spain. According to the Instituto de Valoraciones, foreign buyers account for the purchase of 16% of luxury housing in Spain. As they are very weathy and becoming more and more emerging each day, we can understand why housing prices have risen. On the other hand, there is housing shortage regarding high standard new construction which is very much in demand. Inevitably, both factors have led to a price increase.

LONDON AND THE UNCERTAINTY OF BREXIT

London draws our attention as it is a unique case in Europe. It has always ben one of the most demanded and sought-after luxury real estate locations not only in Europe but in the entire world. However, when Brexit was approved, the London real estate market suffered. As a result, some very exclusive areas, such as Knightsbridge, have undergone a drop of up to 12% in prices. We will pay attention to see what happens in London and the impact of political events on real estate in the months to come.