17 February 2016 – El Economista
These property transactions went up by 60% in January.
The price of luxury housing will rise between 4% and 5% on average in Madrid this year, according to forecasts of Engel & Völkers real estate company, specializing in the sale of luxury properties These increases will not lead the industry to a new bubble, as this possibility goes away thanks to the gradual recovery of the sector, Paloma Perez, general director of Engel & Völkers´ Metropolitan Market Center in Madrid.
Moreover, these forecasts are made taking into account the current situation of political uncertainty affecting real estate and which during the last quarter of 2015 hit the market with a 3% cut in domestic sales. In this regard, Pérez is optimistic and ensures that transactions in Madrid increased by 60% in January. Thus, he ensures that the Spanish capital has consolidated its privileged position in the luxury sector market, becoming the third most attractive city for investors in Europe, only behind Berlin and Dublin.
In addition to strong demand from foreign buyers, domestic investors are taking a larger role in the market, as there is a saver´s profile searching for product “once prices have bottomed out”.
Although uncertainty has not stopped this sector, Perez acknowledges that a lower growth rate than that expected. Therefore, and due to the emerging supply shortage in certain areas, she stressed the need for clear urban planning approaches by the City of Madrid. Real Estate development is back, but there is a significant available land shortage, so use changes will be the alternative, and for that we also need a clear and long-term legislation to provide security to investors.
Original story: El Economista (Alba Brualla)
Translation: Aura Ree