The Global Power Cities 2021 index, published by the Urban Strategies Institute of the Japanese Mori Memorial Foundation, places Madrid for the first time at number 9 in the world, among the TOP 10 most attractive cities for investment, business and talent.
How has Madrid’s luxury market performed over the course of the pandemic?
During the confinement, as in many other sectors, the luxury real estate market in Madrid strongly slowed down and many agreements and contracts that were in progress fell. Due to the uncertainty of the situation, prices slightly decreased in the first place. As we began to recover activity and after a first period of stability, we could see that the pandemic had affected the luxury market positively. Certain aspects of the market had indeed changed but in a reinforced way: a “small tsunami” of demand occurred as there was a much higher priority on living in a truly comfortable house and environment after spending so much time at home. Also, there was a recovery of the real estate figure as a safe haven asset.
Is there room for significant price growth in the market in 2022?
Definitely there is. The current demand has caused an important reduction in the real estate stock and financial tools currently offer beneficial plans such as Golden Visa and low interest on mortgages. Also, the rise of Madrid as one of the most attractive European cities to live in according to international studies attract lots of non-European citizens with high purchasing power and affirm the positive expectation for 2022 in terms of prices.
What do they see happening in Madrid’s luxury market in 2022?
Following the line of the previous question, we expect that the volume of sales will be maintained at least during the first quarter of the year. The luxury market has been strengthened since the end of the lockdown, returning to the healthy market level of the beginning of 2020. This has not only happened in the city center but also in the cities’ surroundings and in the countryside.
Has Madrid’s growth been more muted compared to price increases in other major European cities?
That’s right, we can say that the effect of the pandemic on the prices in Madrid has been less than in other European capitals. In general, Madrid has had a lower price increase during 2019 and 2020 than the average of European capitals and the effect from pandemic has also been less. Madrid ranks third on the most affordable city in Western Europe to buy a property which makes it an attractive destination to establish habitual residence, enhanced with the Golden Visa policy of the Spanish state that offers extraordinary benefits for non-European citizens investing in Spanish real estate. In our opinion and comparing Madrid with the rest of European capitals, there is still room for price growth.