Each day, more and more investors with high purchasing power buy luxury housing in Madrid. It is unquestionable that luxury property is going through good times in Spain, facts and figures speak for themselves. The largest number of real estate deals take place in Madrid, and they account for 45% of the sales carried out in Spain. A few weeks ago, we wrote an article in this blog about Latin American investors who buy luxury housing in Madrid because it is their favourite destination. We also stated that a determining factor was the daily and excellent connecting flights in Madrid to countries like Venezuela, Mexico, Argentina or Colombia. This fact has encouraged investors to purchase property in Madrid. We must also add that apart from the Latin American investor, there are also buyers who come from Spain and other parts of the world such as Asia and the Middle East. It is very significant that, currently, there is a large offer of high level property available for rent in Madrid. However, it is not the case regarding sales. This happens because wealthy investors buy this type of product and later on make it profitable through renting. Thus, regarding it as an investment.
WHAT IS THE LUXURY PROPERTY INVESTOR LOOKING FOR?
It seems clear that high standing property investors pay more attention to the location than to the construction of the property. Luxury housing investors seek property in the centre of Madrid in areas like Chamberí, Salamanca, Justicia, Retiro or Sol. These locations are in very high demand so therefore, it is easy to make the investment profitable in quite a short term. On the other hand, the investors of this kind of product believe that purchasing in Madrid is a very safe business deal. We must not forget that some of these investors come from countries that are going through great political instability, such as Venezuela, and they decide to invest abroad so as not to endanger or jeopardize their capital. In many cases, this type of investor wants the new property to have an added value and fits out spaces inside the house to make, for instance, a gym, a spa and massage area or even a luxurious swimming-pool on the terrace roof. It is therefore very usual to renovate the house so as to make it more profitable later.
KEEP AN EYE ON EUPHORIA
Even though luxury housing in Spain is going through good times, we must be cautious. We all remember the property bubble burst which collapsed our real estate system a decade ago. However, at that time exclusive property did not suffer the effects of the crisis in the same way as the rest. Experts on the matter insist on the fact that the luxury property sector must not lower its guard. It will always have to strive to achieve a maximum quality product in a prime location to justify its market price.