As house prices and transaction activity increase, these five cities are giving potential buyers a new sense of confidence, alongside a high-quality lifestyle
Spain’s capital city, well known for its vibrant culture and football clubs, has also gained a reputation as a key global business centre. Residential property in Madrid is the most expensive in the country.
Values in Madrid increased 9.7% during the year to March 2019, and are 50.1% higher than five years ago. This is the strongest growth of any region in Spain, and demonstrates the high demand across the city.
Transaction activity has also been strong and sales numbers are now just 23.6% below their peak in 2006. This compares with an average of 39.0% across the country.
New residential projects are being built and the increase in construction looks set to be maintained. The number of permits for new residential dwellings in the city increased 13.0% in 2018 compared to the previous year.
The high demand for properties in Madrid is expected to continue and, although prices may not increase at the rate seen over the past few years, values are forecast to rise.
Barcelona offers the best of both worlds, city and beach life, which attracts a wide range of tourists and buyers.
The vibrant startup scene and its growing reputation as a fintech hub has led to strong demand from young, affluent buyers. Amazon, Facebook and Microsoft all now have a base in Barcelona.
Values in Catalonia increased 7.6% during the year to March 2019, taking the five-year growth to 40.5%. Transactions doubled during the same periodSavills World Research
Although price growth has slowed slightly, values in the region of Catalonia increased 7.6% during the year to March 2019, taking the five-year growth to 40.5%. This is the second highest after Madrid. During the same period, transactions have doubled and the number of development permits has increased 523.9%, demonstrating the renewed activity in the market.
In 2018, the number of residential permits granted was 50.8% higher than in 2017. However, the mayor’s new social housing quota has slowed the number of planning applications for larger developments this year.
Despite the political tensions between Spain and the region of Catalonia, the variety, tech opportunities and unrivalled lifestyle are expected to continue to attract buyers from within Spain and further afield.
Valencia is Spain’s third largest city, the home of paella, famous for its beautiful beaches and buildings, and just an hour and 40 minutes by high-speed train to Madrid.
Residential property prices are significantly lower than those in Madrid and Barcelona, which serves to attract investors looking for good rental returns.
Price growth has been slower than some other regions of Spain, with values rising 17.5% during the past five years. Yet, transaction numbers have doubled, indicating an active market. Residential development activity is increasing, a sign that confidence has returned to the market. New building permits being granted suggest this trend will continue.
Málaga has undergone a transformation in recent years. The city is no longer just considered as a gateway to Marbella and other popular places along the Costa del Sol, but a destination in its own right.
The average sale price for residential properties in the city in Q1 2019 was 9.9% higher than the average sale price in the same period a year before.
The city’s revival, year-round tourism and new residential developments are contributing to Málaga’s reputation as an attractive buying opportunity. Prices, transactions and construction activity are all expected to continue to grow.
The lively capital of Mallorca has become a high-end destination with new Michelin-starred restaurants and five-star hotels opening.
Across the Balearic Islands, although the average sale price is increasing (growing 7.3% over the year to Q1 2019), the number of sales has slowed due to a lack of good stock. Annual residential transactions fell 6.3% from Q1 2018 to Q1 2019. However, the city continues to attract a range of buyers.
In general, residential properties in Spain’s traditional resort markets have not shown the same level of recovery as Madrid and Barcelona over the past five years. However, prices have started to grow during the past year, demonstrating market confidence and presenting an opportunity for buyers.
The Balearic Islands have bucked the trend somewhat with price growth of 37% over the past five years, behind only Madrid and Catalonia in terms of growth. Mallorca is the tourism powerhouse of the islands, with a well-developed infrastructure supporting visitors year round. Ibiza, on the other hand, is considered the most fashionable island of the Balearics.
The Costa del Sol includes the upmarket resort of Marbella as well as Spain’s sixth largest city, Málaga (see above).
The coastal region of Costa Brava lies north of Barcelona where the foothills of the Pyrenees meet the Mediterranean Sea. In the province of Girona, the average sale in Q1 2019 increased by 8.9% compared with the average sale price the previous year.
Read the articles within Report: Spain Residential below.