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Spanish luxury property sales grew by 55%

After leaving the long recovery from the pandemic behind, the year 2022 closed as a historical milestone of growth for the real estate market in Spain. The appetite for acquiring residential housing reached unprecedented levels among Spaniards and also attracted a large foreign investment. According to data from DataInvex of the State Secretariat of Commerce, this investment exceeded 34,178 million, which represents the second highest figure recorded in history. 

As for 2023, experts observe a trend towards stabilization in the general market after the boom of the previous period. Growth is expected to be comparable to pre-pandemic levels. However, the luxury housing market continues to stand out. According to the new Report on the Spanish Real Estate Market by Lucas Fox, in the first half of the year, this market has remained a driver of the rest of the real estate sector. While the rest of the sector has stabilized, the luxury market has experienced strong growth, with a 10% year-on-year increase in the company's transactions in the first half of 2023. The majority of these transactions have taken place in Barcelona (+43%), Madrid (+50%), Ibiza (+50%) and Costa Brava (+100%). 

For its part, the Report on the Luxury Housing Market in Spain, prepared by Hiscox Spain, reveals that in 2022 there were about 8,000 real estate transactions of more than 3 million euros in the country, which was an increase of more than 55% compared to 2021 and more than double that in 2019. Another relevant fact is that, in the last two years, luxury property prices have increased by between 10% and 20%, surpassing pre-Covid levels. For the next few years, prices are expected to remain stable in the luxury housing market. 

Both reports also highlight that the supply of luxury housing is highly concentrated in a few regions: 97% of the supply is located in nine provinces. Marbella, in the province of Malaga, is the epicenter of the coastal luxury segment, with the largest offer of luxury homes for sale, followed by the Balearic Islands and Madrid. In fact, the luxury segment already represents 15% of the local market in the Balearic Islands, 9% in Malaga, 3% in Madrid and less than 1% in the rest of the Spanish provinces that represent the remaining 80%. 

Globally, according to Hiscox, the United States tops the list of the most attractive destinations for investment in luxury homes of the ultra-rich, followed by the United Kingdom and Australia. Spain ranks fourth in the world and first in continental Europe, which demonstrates the country's competitiveness in this segment. The main foreign buyers of luxury homes in Spain come from the United Kingdom, Germany, France, Latin America, Russia and China, in that order. These buyers are looking for a safe investment or a second residence. In addition, in recent years, North American and Middle Eastern buyers have also joined the luxury housing market in Spain. 

As for the buyer profile, Millennials and Generation Z are expected to account for more than 60% of the luxury market by 2025. It is estimated that the spending of these generations will grow three times faster than that of others. In Spain, their presence has already been noticed in the luxury housing market, where they represent 25% of total transactions. However, Generation X (i.e. born between 1965 and 1981) continues to lead the buying and selling of luxury properties due to their greater purchasing power.