Spain is in vogue in luxury real estate. The great fortunes and main assets from around the world have set their sights on the country and in recent years have staged a landing that, far from slowing down, continues to grow. The demand for prime housing is on the rise, and places like Malaga are a clear example. In the province, one out of every ten homes are luxury properties exceeding the 2.5 million euro mark.
This is reflected in the latest report from the international firm specialized in real estate, Lucas Fox, which points out that the luxury segment represents 10% of the total real estate offering in the province of Malaga, where newly constructed residential complexes such as Be Grand Limonar, La Térmica Beach, or Málaga Towers are located.
According to their data, Malaga has established itself as the province in Spain with the highest percentage of luxury properties, exceeding 2.5 million euros, concentrating 30% of the national supply. In the country as a whole, the Andalusian province surpasses other destinations with a high concentration of luxury properties such as Mallorca, with 27% of the prime offer, Madrid with 9%; Barcelona with 7%; Alicante with 7%; Ibiza with 6%; Girona with 4%; Cádiz with 2%; Tenerife with 2%; and Menorca with 1%.
The boom in luxury housing in Spain is a reality. The coronavirus pandemic marked a turning point and led to the takeoff of a market that until then was limited to very specific areas. The climate, cultural and gastronomic offerings, and prices, which are very attractive to many foreign buyers, have fueled a demand that is increasingly met with limited supply. Price pressure is increasing. Over the last five years, the average value of a luxury home has increased by 28% between 2019 and 2024, according to calculations by the North American chain Keller Williams.
This increase in prices has led to the threshold for considering a property as luxury now being around 2 million euros, whereas before the arrival of Covid-19, it was set at 1.5 million. This adjustment reflects the market's revaluation.
"In key markets like Madrid and Barcelona, an average annual increase of 10% in the value of these properties has been observed," says Leonardo Cromstedt, president of Keller Williams Spain & Andorra. "In cities like Marbella, where our company's headquarters in Spain is located, this growth has been even higher, reflecting a growing interest from foreign buyers."
The supply is trying to respond, and although it is insufficient in the face of growing demand, it has also experienced upward changes. Taking data from the North American real estate firm, the availability of properties valued at over 800,000 euros has increased by 150% between January 2019 and March 2024 throughout the country. "More and more international buyers see Spain as a safe and profitable investment destination," highlights Cromstedt.
Looking ahead, the outlook seems equally positive. The luxury housing market in Spain will continue to expand, driven by foreign investment and the consolidation of premium destinations. However, factors such as potential tax obstacles to foreign investment and competition from other international markets interested in attracting this clientele will be decisive for its growth.
The government is preparing a regulatory change to prohibit the purchase of housing by non-EU foreigners and non-residents in the country with the aim of trying to discourage the market and reduce pressure on the real estate markets of the most stressed cities. It is not easy to push this through, but the Minister of Housing, Isabel Rodríguez, reaffirmed last week her commitment to try.
According to sector experts, one of the key factors in the evolution of the luxury market in the coming months will lie in the monetary policy of the European Central Bank (ECB), as in an environment of economic volatility, international investors seek diversification and security, making luxury housing in Spain a refuge, an attractive alternative to other assets.
Keller Williams' analysis also echoes the impact that luxury tourism is having on the market as a driver of exclusive property sales and rentals. "In destinations like Marbella, Ibiza, or Sotogrande (Cádiz), the rental profitability in the premium segment can exceed 5-7% annually, making these assets an attractive option for investors seeking solid and sustainable returns," they emphasize.