The increase in house prices in Spain leaves no one indifferent, not even the rich. This is what is happening in some very localized areas of central Madrid, where prices per square meter in ultra-luxury homes continue to break all records. When in recent years the capital was positioning itself as a destination where large foreign fortunes began to stake, real estate consultants repeated that the highest percentage of buyers was still national. Many of them came from other communities.
But reality has changed, according to data managed by Lucas Fox, a company specializing in the luxury real estate sector. “There is a surprise in most cases without foreign buyers first when it comes to luxury homes”, said Paloma Pérez, executive director of Residential, presenting this Tuesday the latest report from Lucas Fox on the real estate market. The main reason for this progress is the increase in the cost of real estate. “With the growth of prices, we have seen that the Spaniards are much more sensitive than foreigners. When the square meter cost on average 4,000 euros it was competitive for the national market. Now, with an average of 12,000 euros, or projects reaching 25,000 euros, the Spaniards are not entering the market and there are a majority of international buyers,” explained Marco Gramaglia, director of the Madrid company.
Leaving behind the figure of 20,000 euros per square meter, the question is whether it will reach 30,000 euros. “In the next few years this will happen. And even, in some projects it will be surpassed. We are already seeing some apartments overlooking Retiro Park with prices of 26,000 euros,” said Felipe Ocampo, investment director of the consultancy firm. In this regard, Alex Vaughan, co-founder of Lucas Fox, underlined that “Madrid has potential, but for specific and very good projects. In the area first prices will continue to rise. The international buyer is used to more expensive amounts.” And he recalled that in Barcelona we have already seen transactions closed “for 40,000 euros per square meter and even 70,000 euros”, in reference to a duplex penthouse managed by the Mandarin Oriental hotel group.
They are exactly the ones branded residenceshouses with luxury hotel services linked to large international brands, which according to Vaughan reach the highest prices on the market. And in them it is not only the purchase outlay that must be taken into account. Every month the owners have to deal with condominium expenses, which at Lucas Fox range from 2,000 euros and up, not suitable for all budgets. “For the national customer, even if he has a high purchasing power, it is scandalous. On the other hand, a customer from New York or Miami is already used to these expenses. Between 2,000 and 2,5,000 euros per month in community expenses is normal”, assures Ocampo.
Likewise, he argued that for a New York real estate investor, “paying 30,000 euros per square meter in Madrid is not crazy.” And he specified that these profiles are “leaving” the Big Apple, after Zohran Mamdani’s victory as mayor, and looking for new markets.
Among these new horizons, Spain is very well positioned to attract investments from large international funds and from family offices of international millionaires, according to the report. In fact, Bravo underlined that, by 2026, it is expected that in Spain nine out of ten houses worth more than five million euros will be purchased by foreign citizens, whether resident in the country or not. The main markets for these transactions will be the usual ones, Madrid, Catalonia, Balearic Islands and Costa del Sol.
The report also claims that prices in the luxury segment continue to be more competitive than in other neighboring countries. To which Vaughan added that “Madrid’s competition, like London, Paris and Barcelona, suffers in perception due to fiscal and security issues.”
The price increase also brought with it what Bravo called “excess” in traditional areas of the market. first. “This is what we are seeing, for example, with Marbella. Those who can no longer buy there move to Estepona. Naturally they have to buy a product that is very good.” They are also realizing this in Madrid, with areas outside the M30 where assets are offered first with lower prices than in the center and whose buyers “are Spanish in 95% of cases”.
As regards the origin of international buyers, Vaughan explained that Americans and Europeans are on the increase, while Middle Eastern citizens who traditionally invest in Marbella and come to Madrid are increasingly becoming noticed. “Until now the vast majority came from Latin America. We’ve been seeing more diversity lately.”
