The areas of Madrid most in demand for luxury homes are Salamanca, Jerónimos and Chamberi. The price increases are as high as 8% in Jerónimos and 7% in the Salamanca district. The biggest problem is there is a shortage of newly built luxury houses.
There has also been a growth in the sale of luxury properties in Marbella and this is expected to continue during 2016. It is of particular note that, according to the Malaga College of Architects, in 2015, 492 building permits were authorised in Marbella. Marbella is one of the most attractive markets for foreign investors, especially for individuals from the north of Europe, particularly the UK, Benelux and Scandinavia.
According to the Prime Global Cities Index, in the last quarter of 2015, Madrid was the second highest European capital in terms of the annual growth rate in the prime residential market, with a rate of 5.2% compared with the European average of 0.8%. There are also other parts of Spain such as Ibiza, Barcelona, Marbella and Majorca that receive investment in luxury homes.
With regard to the island of Majorca, the market for luxury homes has been unaffected by the crisis. In 2015 sales of this type of property amounted to a total of € 292 million, with an average price of € 5,545 per square metre. The most common buyer is usually German, pays in cash and lives on the island for a large part of the year.
In 2015 the prime housing sales in Majorca grew by around 40% over 2014, with a price increase close to 13%. The areas with the highest demand are the southwest of the island and the Son Vida area.
The residential market in Barcelona also shows positive results, with an increase in residential construction as well as an average price increase of 7%.
In Barcelona the demand for housing from abroad is led by Germans, French, Italians, Dutch, Argentinians and Swiss. This demand, combined with that of the domestic market, has resulted in a 20% increase in the sale of houses in the Eixample area in 2015. The average price of the best houses in the area is around € 5,250 per square metre and even reaches € 11,000 per square metre in the most exclusive properties on Passeig de Gracia. These prices compete with those of Zona Alta where the most luxurious properties in the city are situated and the limited number of new property developments go on sale at € 9,000 per square metre.
Therefore, the Spanish luxury property market is working at full capacity and the prospects for 2016 are that prime housing sales will continue to grow and prices will increase.