Foreign buyers of luxury housing in Madrid, depending on their nationality, prefer to invest in new construction or in second-hand housing.  According to studies carried out by real estate agencies specialized in the luxury sector, American and Asian investors in luxury property in the capital, usually look for new construction property, whereas European buyers prefer second-hand housing. In this regard we can say that the age and antiquity of luxury real estate in Madrid will determine the nationality of the foreign buyer who will finally purchase the property. In this blog some time ago, we wrote an article about why luxury housing has a taste for Madrid. In that article, we pointed out that the capital of Spain is one of the most demanded cities in the whole world in which to purchase high standing property. In spite of the health crisis we are living through, luxury real estate sector has withstood quite well, especially in Madrid, because the most exclusive houses continue to be sold at a good pace. Furthermore, in spite of the fact that the pandemic has contributed to giving prominence to the Spanish homebuyer, this does not mean that foreign investors are still not very important. But, why does a nationality influence whether to invest in new or in second-hand housing? Let us take a look at this in detail.

CULTURAL TRADITIONS PREVAIL

Europeans are accustomed to living in second-hand property, however luxurious it may be. Because of this, when they purchase property in Spain, they look for this type of housing. Obviously, as these are exclusive properties, top-notch renovations are expected as they are not new construction homes. As regards luxury real estate, among the European buyers the ones that stand out above the rest are the British, the Germans, the French and the Italians. All of them in their own countries usually live in classic or palatial properties, many of them built at the beginning of the XX century or even the XIX century. On the other hand, the Americans and the Asians in their own countries live in new construction homes and thus, this plays a decisive role in the search of new construction housing when they want to purchase in Madrid. As we have already seen in this blog, people from Venezuela, Mexico, the United States and China are regular investors in the luxury real estate sector in Spain. In their home country they live in new and spacious houses which are equipped with the latest technology, swimming-pool and common areas. And therefore, this is the type of property they look for to purchase in Madrid. Hence, we can say that the cultural traditions of the home country prove to be decisive when it come to choosing and buying high standing property, because these investors want to purchase the same type of house as they have in their own country.

NEW CONSTRUCTION HOUSING, MUCH MORE EXPENSIVE

We must take into account that new housing in Madrid is considerably more expensive than second-hand housing (it is estimated that, in some cases, the difference in price can be 40%), and we can say that the Chinese and North American luxury housing investors are the ones that spend the largest amount of money. On the other hand, Madrid has the problem that there is less and less land available for building. This fact means that if one wishes to live in the centre of the city (the four most demanded areas in luxury real estate in Madrid are Barrio de Salamanca, Chamberí, Retiro and Centro), it is very difficult and even nearly impossible to find new construction housing. This means the American and Chinese buyers very often have to look for property in the outskirts of Madrid.