Some segments of the real estate sector have shown resilience to the health pandemic. Among them is the luxury residential, which has withstood the Covid 19 crisis and has growth forecasts for both this year and next year.
“Luxury housing has suffered less pronounced price drops than real estate in general,” says Emiliano Bermúdez, deputy general manager of donpiso. Thus, the market expects a price increase of over 3% for this year .
The crisis generated as a result of the pandemic has been different from that of 2008, where the real estate market, according to Bermúdez, “suffered from structural and systemic problems”, while, in the current one, “there has been a contraction in demand “. A contraction that will return to normal as vaccination progresses. “In this sense, it is expected that the luxury market in Spain will start to grow this year, ” says the deputy director general of donpiso.
Bermúdez explains that luxury housing is a very attractive asset for investors, due to its great security . “It has become a safe real estate value, due to its resilience to withstand crises, because there are always rich,” says the expert.
Madrid and Barcelona, in focus
Beyond the islands or some areas of the Mediterranean, the expert warns of the good position in the world prime market enjoyed by Madrid and Barcelona : “The extensive cultural life of both cities, the weather and the most attractive prices places them in the top 10 cities worldwide for the prime customer “.
Madrid and Barcelona are among the most promising destinations for luxury real estate investment this year. In fact, the annual study Global Property Handbook, by Barnes, shows how both cities continue to gain importance in the international real estate scene until they are in the top ten of the most interesting cities for real estate investment in 2021 . The capital occupies the sixth place in the ranking followed by Barcelona, in seventh position. The top positions on this list are occupied by Paris, Genoa, London, New York and Quebec.
In addition to the attractiveness these cities offer, the flexibility of teleworking is reflected in the growing demand for prime housing by foreigners. “In terms of attractiveness, the usual foreign visitor has been joined this year by this visitor profile who comes to telecommute,” explains Bermúdez. Thus, the donpiso expert points out that this “new mode” of visitor moves the sale and rental market even more , since it tends to spend “more time” in the country.
Not surprisingly, the purchase of luxury homes by foreigners has registered historical percentages in 2021. If the impact of non-residents has been slightly reduced in standard housing, for properties of more than half a million euros, it has increased, standing at 7% of the total , according to the data of the College of Registrars. “With the impact of the summer period, this is likely to increase even more,” concludes Bermúdez.
In fact, according to a study by the luxury real estate agency Barnes, in Madrid the foreign buyer represented 40% of the demand in the first half of the year . During the pandemic, national demand was the absolute protagonist, monopolizing 80% of the sale and purchase operations and with a tighter budget, between 500,000 euros and one million euros.