Madrid is the third world destination in luxury real estate investment in 2019

The Plaza Mayor of Madrid. / WIKIMEDIA

Madrid will be the  third city in the world  that will receive the most investment in the luxury real estate market  in 2019, according to the ‘Destinations to watch’ index presented Thursday by the  Barnes company as part of the company’s annual report ‘Global Property Handbook’.  

This indicator indicates those destinations that “more  growth opportunities will  register” throughout the year, a list in which the capital is below  Lisbon and Oporto , which occupy the first two positions. 

Likewise, Madrid enters for the first time in the first ten positions of the  ‘Top 50 cities index’  of 2018, which reflects the cities that more investment hoarded during the past year in this sector.

“Financial and emotional” elements

These indicators analyze  “both financial and emotional elements” , since the profile of the buyer of luxury real estate stands out for making purchases with a “passional” component but always with a strategy “similar to that of buying a business”. 

The presentation of the report ” Barnes Global Property Handbook ”, which took place at the Wellington Hotel, was attended by the  world president of the  Barnes group , Thibault de Saint Vincent; the  director of  the company’s area in Madrid, Anna Molgó; and the  artistic director  of the company, Rodrigo Uhart. 

Molgó stressed that in the case of Madrid,  Latin American customers  have the most presence, especially “Mexicans and Venezuelans, because of the political situation in both countries and the  cultural ties  that bind them to Spain.” 

The majority of those interested are Latin Americans, especially from Mexico and Venezuela because of the local political situation, as well as cultural ties to Spain. “In our case around 70% of our clients are from Latin America and we have witnessed a  strong increase in Mexico  with the arrival of López Obrador – the new president of the country – while that of Venezuela has stopped a bit more”, has pointed Molgó. 

Differences by neighborhoods

Thus, the head of the company in the capital, has specified that the areas that generate greater interest are the neighborhoods of  Salamanca and Chamberí ; and has emphasized the Recoletos area. He explained that his portfolio seeks, above all, housing between 800,000 and 3 million euros and that in the city the price per square meter will increase by two percent throughout 2019, so it will be around 7,000 euros per square meter. Barnes currently has 180 homes in Madrid. 

Asked about the effect of Royal Decree 7/2019 on urgent measures regarding rental and housing, approved by the Central Government, Molgó has indicated that “at the moment” they have not noticed changes in their market. 

Barcelona disappears from the index

Finally, he explained that the  destinations of Barcelona and Madrid  “are totally  complementary “, since the main profiles are different. The capital city does not appear in any of the two indexes of the company, after it fell from the main index in 2017 from the 20th position. “The main problem is  political instability , which often frightens investors,” he said. explained the global president of the company. 

This uncertainty has also affected the  position of London , which falls in 2018 to sixth place, due to the effects of  Brexit , which has caused the price of luxury housing to fall by 30% in the last three years. Paris has collected these customers, while Madrid has not been almost affected “because it is not a city focused on high finance” as is the case of the capital of the United Kingdom, has indicated Thibault de Saint Vincent. 

The other area of ​​Spain that appears in this report is the  Balearic Islands , which is ranked third in the  most attractive coastal destinations  for the luxury real estate market.

Thus, company executives have informed that they will  increase their presence in the capital , through a new office, and that they intend to establish delegations soon in Andalusia (Marbella and Seville), Valencia, Baleares (Palma de Mallorca and Ibiza), and in Tenerife.