Luxury residential is experiencing a good moment in Spain and is consolidating itself as a safe haven for investment in the entire European Union. In the first half of 2024, the supply of homes worth more than 2.5 million euros grew by 7%, reaching a stocks of 14,060 properties, according to data from the latest report on the real estate market prepared by Lucas Fox.
This increase contrasts with the 12% decrease in the global supply of the real estate sector at the national level. Despite this, the demand for new construction has remained solid in 2024, with sales between January and September reaching the highest levels of the decade, that is, with an increase of 24% compared to the average of the last ten years. However, construction has plummeted to almost the lowest level in the decade, with a drop of 53% year-on-year. These data reveal, according to the company, the mismatch between the needs of the population and the market’s capacity to meet housing demand.
An encouraging fact comes from the great foreign appetite, which has increased significantly after the Covid pandemic. During the first nine months of the year, 64,735 home sales in Spain were signed by buyers coming from abroad, the second highest level recorded. This represents an increase of 1% compared to the same period of the previous year and an increase of 28% compared to the average for the decade.
Likewise, the market share of international buyers was 19%, one point below the previous year. In the second quarter, transactions closed by foreigners increased by 5%, so growth has accelerated as the year has progressed.
USA, in the lead
This interest is also perceived in the high-end segment. According to the Lucas Fox study, international buyers represent 66.9%, while national buyers remain at 33.1%. Customers from the US stand out in first place, representing 10.4% and remaining in the lead, followed by those from the Netherlands, the United Kingdom and France, with 8.2%, 7.9% and 6.6%. , respectively.
What attracts Americans? “We know that we have the climate, the gastronomy as drawbacks… but we are also a very safe place if we compare ourselves to them. In addition to being cheaper. To reside in most large cities in the US you have to earn about 250,000 euros a year Here, the cost of living is lower and many keep the American salary,” explains Alexander Vaughan, co-founder of Lucas Fox.
In short, residential buyers prime They are divided equally between those who are looking for a profitable investment and those who want to form a new home either for work or seeking a higher quality of life. Exchange students have also taken off in recent years, seduced by the positioning of national universities and business schools.
“For five or six years, there are more and more people who want to put part of their money in real estate, and Spain increasingly occupies the list of countries where people want to invest their capital. We see it in the case of Latin America, where due to political changes people come here not only to enjoy themselves but also in search of more security,” reflects Stijn Teeuwen, also co-founder of the company.
More dynamic locations
On the other hand, the report details that the supply of luxury properties is highly concentrated in some regions. In this way, Malaga concentrates 30% of the market prime for sale; Mallorca, 27%; Madrid, 9%; Barcelona, 7%; Alicante, 7%; Ibiza, 6%; Girona, 4%; Cádiz, 2%; Tenerife, 2%; and Menorca, 1%.
What’s more: luxury residential now represents 10% of the total offer in Malaga; 18% of Mallorca’s supply; and 32% of Ibiza’s offer. In the case of the southern capital, these data are explained, fundamentally, by the greater availability of land, a situation that Madrid also experiences compared to Barcelona.
Regarding Lucas Fox operations, in the first half of the year the company concentrated 37.5% of transactions on the Costa Brava, 12.5%, in Barcelona, 12.5%, in Garraf, 12 .5%, in Ibiza, and the same figure was reached in Madrid, while Alicante concentrated 6.3% and Andorra also closed the remaining 6.3% of transactions, despite the fact that the market in the Pyrenean enclave registered less movement.
Lack of new product
In the case of Barcelona, sales have grown by 6% in the first half, driven by both local and foreign demand; the latter has climbed to 17%. Barcelona’s problem is the “lack of new product.” “This situation causes prices to grow very quickly and well above what we had last year. This is due to the lack of new construction and the lack of final land. The high construction costs, which have increased 30% compared to 2019. Right now we do not have all the units available for the demand we receive from the market,” summarizes Victoria González, listing manager for Barcelona in the group.
Despite this situation, which is not limited to the Catalan capital, “we are optimistic about the continued momentum of the market, which shows no signs of slowing down.” “Ultimately, we expect a significant increase in luxury home sales in 2025,” concludes Stijn Teeuwen.
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