21 September 2015 – Blog Anida
Luxurious and cheap. Numerous houses in Madrid meet these two criteria and as such, the richest people in the world increasingly want to purchase property in the Spanish capital.
A study performed by the company Coldwell Banker regarding the average price of luxury housing in Europe’s major cities explains why: Madrid ranks towards the bottom of the list, with an average price of €9,000/m2, well below Monaco (€60,000/m2), Paris (€25,000/m2), London (€18,000/m2) and Milan (€14,000/m2).
In addition to its low cost, the capital has significant urban appeal and strong economic growth forecasts. The complete package has meant that Madrid has appeared in The Wealth Report, the Top 40 cities that spark the most interest amongst high net worth individuals (HNWIs) for the first time.
The report, prepared each year by the real estate consultancy Knight Frank (which specialises in the sale and rental of exclusive properties), analyses both the investments and purchasing trends of HNWIs, i.e. those that have fortunes of more than $30 million (of which there are 172,850 individuals in the world, 3% more than in 2014).
Madrid is ranked 18 out of 40, ahead of cities such as Dubai, San Francisco and Amsterdam. Monopolising the podium for yet another year are London, New York and Hong Kong.
This ranking refers to trends, but a more rigorous data set can also be used to assess Madrid’s evolution: the number of wealthy individuals that now live in the Spanish capital. According to The Wealth Report, there are 544, up 5.1% from a year ago, the same increase as seen in London. This places the city in ninth position in Europe, with more ultra rich people than, for example, in Munich, Stockholm, Oslo and Barcelona (with 438).
According to Humphrey White, Managing Partner of Capital Markets at Knight Frank, “the cities of Madrid and Barcelona are home to 982 wealthy individuals, 63 more than last year, and are now following a clear and growing trend, which is contributing to the increase in the prices of luxury residential property”.
During the same period, the number of HNWIs resident in Spain increased by 2%. “Wealth continued to grow around the world last year” – says Kate Everett-Allen, Partner of International Research at Knight Frank -. In fact, around 15 people per day joined the ranks of the ultra rich. In one decade (since 2004), the number of HNWIs has increased by 61% and that trend is set to continue, with a forecast increase of 34% over the next 10 years. And in Spain, in particular, the number is set to grow by 24%.
Original story: Blog Anida
Translation: Carmel Drake