The luxury apartments market in Madrid prime areas such as Salamanca has gathered momentum compared to the last year, with a 25 per cent increase in the number of transactions and with some prices that normalized after the crisis. Moreover, transactions are becoming shorter and shorter, with periods reduced to between 3 and 6 months. Meanwhile, the districts of Salamanca and Chamberí lead the recovery of demand for primary homes.
According to the Prime Residential report from the Knight Frank real estate consultancy, prices have risen or have remained steady in the last year, with the Los Jerónimos neighbourhood and the district of Salamanca leading the recovery with value increases of 8 and 7 per cent respectively in secondary transfers. Chamberí, meanwhile, rose by some 3 per cent.
In the meantime, new construction presents problems in the scarcity of supply that is available in Madrid. This includes for new homes, as well in the demand for quality, which will create a problem for primary production demand.
Salamanca and Chamberí are the districts that remain at the head in terms of prices for new construction, with a 4 per cent increase, followed by the El Viso neighbourhoods (2 per cent). Justicia and Habana show declines of 2 per cent and 4 per cent.
With regards to demand, Salamanca, Los Jéronimos and Chamberí continue to be the zones in highest demand in Madrid, making up 70 per cent of the demand. Other areas like El Viso are starting to garner greater attention. In these areas, the buildings that are in highest demand are found in the area of between 1 and 2 million euros.
National consumers still capture 70 per cent of the prime housing purchases. Nonetheless, foreign buyers continue to gain weight in the luxury housing market, doubling their purchases with respect to two years ago. Latin American buyers are the ones who have laid their eyes on the capital of Spain.
The predictions for the next year and a half are that approximately 80,000 square meters will be constructed, between both new construction and refurbishment. The projects that need to be taken into account are the Four Seasons Private Residences in the Canalejas complex, Lamarca in Fernando VI, 10; José Abascal, 48 or Antonio Maua, 8, among others.
Thanks to these figures, Madrid is the European city with the second highest year-to-year increase in the prices of primary residences, according to Knight Frank’s Prime Global Cities Index, updated in the last third of 2015.
The Spanish capital increased its median prices by 5.2 per cent, higher than the .8 per cent European average and ahead of major cities like London or Paris. Only Monaco (9.4 per cent) surpassed Madrid in price rises. Vancouver leads the global ranking with a year-to-year increase of 20.4 per cent, followed by Sydney (13.7 per cent) and Shanghai (10.7 per cent).