Spain’s luxury property market is gaining ground
The report which covers the period to Spain has earned the title of Europe’s comeback kid but to what extent is the country’s prime property market mirroring the economy’s return to growth?
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Spain’s economy has recovered strongly following the Eurozone crisis. In 2016, Spain’s GDP growth (2.6%) is forecast to exceed that of both the UK (1.9%) and Germany (1.5%) and remain well ahead of the Eurozone average over the next three years.
Ultra-loose monetary policy by the European Central Bank and low oil prices have led to an increase in consumer spending, higher employment and rising household incomes. The market fundamentals are improving but there remains a backdrop of global uncertainty.
The report which covers the period to April 2016 highlights two key property market trends. Firstly, the rise of the non-EU buyer – Latin Americans now have a strong presence in Madrid, Middle Eastern buyers are active in Marbella plus Swiss purchasers in Ibiza. The profile of Spain’s luxury buyers is shifting. The second key trend is the strength of the €1m-€3m price band; nearly all of our prime markets now consider it their most active market segment.
- Confidence is returning to Barcelona, the number of residential sales increased by 86% between 2012 and 2015
- Online property searches on Knight Frank’s website by Middle Eastern web users searching for a property in Marbella increased by 164% between 2014 and 2015.
- The top-tier of Ibiza’s property market has become uncoupled from the wider market, recording price growth of 10% in the year to April 2016
- Mallorca saw a 55% increase in the number of applications for new residential projects in the first two months of 2016 compared with the same period in 2015
- A third of Madrid’s prime buyers now come from abroad. In 2015 Latin American buyers accounted for 30% of all the prime sales agreed by our Madrid sales team.
