Foreign Investment Drives Luxury Market
According to research recently published by a leading international estate agent wealthy overseas buyers are driving the luxury property market in Spain. The highest growth trend has been seen in prominent cities and the most sought-after coastal areas of Spain. Sales of luxury properties during 2018 were reported to have increased by 28% year-on-year throughout the country in comparison with a growth of over 56% in regions such as: Ibiza, Barcelona, Marbella and Valencia where the average property price in 2018 was over 1.5million euros.
Overseas investment in all types of property increased by 13% across Spain in comparison to the same period in 2017. Agency figures indicate that British buyers were still the largest group accounting for 15.5% of all sales to non Spanish nationals. The UK market also represented 22% of investment in luxury properties, defined as those priced at over 900,000€. These figures seem surprising considering the possible consequences of Britain exiting the European Union, however, the impact of the 2016 referendum result proved to be both temporary and negligible in effect.
Some 56% of all foreigners purchasing Spanish property were reported as requiring a holiday home, whilst 22% were in the market for a primary residence and the other 20% entered the real estate market purely as an investment. Properties situated in highly desirable rural or coastal regions are in minimal supply thereby creating maximum demand and commanding the highest prices. These exclusive properties present an attractive package to overseas buyers with the budget to acquire them.
Investment in Spanish, high-end real estate can prove a lucrative and exciting prospect whether purchased as a retirement or second home, a rental project or as a new life venture. According to information published by the Spanish Land Registry residential sales by foreigners have also risen from 19,800 in 2010 to approximately 65,500 in 2018, an increase of over 20%. Foreigners have undoubtedly seen the potential of investment in Spanish property and last year accounted for some 12.6% of the total market.
Luxurious homes in prime locations have proved the most attractive to overseas buyers as they provide the greatest prospect of a good return. Average prices across Spain have risen by 8% since 2014 and significantly more in some cities, coastal and rural areas. Ibiza is the perfect example of a destination rich in unique opportunities for investment. Given its size it offers an incomparable selection of rural estates, country villas and stylish apartments. The island exudes an enigmatic charm and every region boasts its own attractions.
The laws governing the thriving Spanish property market are sympathetic to overseas buyers and the country has an established reputation as a global destination for tourists. It is inevitable, then, that discerning investors from Europe and the rest of the world are looking to Spain to purchase real estate. Overseas investment initially proved to be the key to recovery for the Spanish property market during the decade following the financial crisis and all indications are that it will continue to support the growth and expansion of this vital section of the Spanish economy.
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