Luxury housing in Spain is going through a price increase but in a more moderate way than in other large cities in the world. This is the conclusion that can be drawn from the ‘Prime Residential World Cities Index’ a report that was published some weeks ago by the British consultancy firm Savills. In this report, the price of rental and purchase of luxury housing throughout the world was analyzed, and both Madrid and Barcelona produced similar results: in these two cities the prices had risen in the first six months of 2022, but not as much as in most of the main cities in the world. In Madrid, purchasing an exclusive property costs 1,5% more than in the first half of 2021; currently, the price of a luxury house is an average amount of 7.070€/m2. In relation to rental, the price increase is slightly higher: 1,8% and the rental profitability stands at 3%. On the other hand, in Barcelona the purchase of high standing property costs 1,4% more than in 2021 (6.530€/m2) and rental is 1,5% higher (rental profitability stands at 3,5%). The price increase that has taken place in our two main cities contrast with the price rise in the rest of the large cities throughout the world. According to the Savills report, and after having analyzed 30 cities in the world, the purchase price rise stands at 2,4% and rental at 3,1%. Thus, we can say that in the first six months of this year, the price increase in the Spanish real estate sector is below the world average.

MIAMI, LOS ANGELES AND SAN FRANCISCO, ON THE FRONTLINES OF PURCHASING

In Spain, luxury housing is going through good times, and there are good prospects for this sector. In addition, at the end of 2022, the facts and figures are expected to be even better than those of 2021. Something similar happens in other countries, because as we have already mentioned, during the first six months of this year the price has increased in the high standing real estate sector of the main cities thoughout the world. According to the Savills report, the purchase price increase of 2,4%, which we have already pointed out, has taken place in 90% of the analyzed cities. The city where the purchase of luxury housing has increased the most is Miami, as the rise during the first six months of this year stands at 12,5% a figure that nearly doubles that of the city that comes after in the list (in Miami, the purchase of property has an average cost of 12.400€/m2). After Miami come two other Northamerican cities; Los Angeles in second place with a purchase price increase of 6,5% and an average purchase price of 15.750€/m2. In third place we have San Francisco with a price increase of 5,5% and an average purchase price of 16.040€/m2. Hong Kong draws our attention because being one of the cities where the purchase price has dropped (a fall of 3%), it is still the most expensive city in the world to buy luxury property. According to the report of this consultancy firm, the widespread growth in the prices of high standing real estate has happened because of the low interest rates as well as to the value that the buyer bestows to exclusive properties as they are regarded to be one of the best possible investments, and hence causing the product to become more expensive.

NEW YORK AND SINGAPUR, LEAD THE RENTAL MARKET

In relation to the rental of luxury housing, New York and Singapur are the two cities where prices have risen the most. In both of them an increase of 8,5%, with regard to the first six months of 2021, has taken place. It is calculated that the rental gross profitability of the luxury housing sector stands at 3%. Nevertheless, some cities like Dubai, New York and Los Angeles exceed this profitability with percentages of 4,8%, 4,7% and 4,6% respectively. The main factor that has been the cause of this increase in exclusive housing rental prices is the shortage of the product as there are hardly any offers of prime houses in the world. According to the report carried out by ‘Prime Residential World Cities Index’, the demand for rental in exclusive properties does not drop and this stimulates the rebound in prices.