Madrid property market update.
Having sold the Ortega y Gasset property before Christmas, I spent most of January pounding the streets in search of a new project. It took me until mid-February to reach an agreement on price and sign the deposit or Arras contract on the property I had set my sites on in Chamberí; as a number of other interested parties were also offering on the property.
Madrid is seeing a rise in demand for centrally located properties in prime areas whether from those looking to invest in a European city still cheaper per m2 than its other capitals (whether for the long term return or the immediate income from a rental property, both long-term or the increasingly more lucrative short term executive rents and the ubiquitous AirBNB).
Add to the this the influx of buyers from outside Madrid, looking to invest here in the face of uncertain political situations at home, whether abroad (Venezuela, Colombia) and even those from within Spain (Catalonia). Not forgetting of course, those who are seeing the upswing in the market and looking to get in on the action.
Sellers in prime areas (Salamanca, Chamberi, Justicia) know when they have a desirable product and are holding firm on pricing or taking looking offers above asking prices, and buyers know they have to be ready to sign and pay the deposit as soon as they find something they like. Properties that tick all the boxes for developers (exteriors, light, lift, etc) are being snapped up fast.
Before buying the flat on Eloy Gonzalo, I offered on two other flats; the first one was a fifth floor flat in the Justicia area (with a complicated floor plan but lovely entrance on a great street, a lift - of course - and spectacular views) which I went to see one Monday morning at 10am; along with about 20 others at the same time. I offered full price as I walked down the stairs of the building at about 10.05am and it was already under offer for almost 10% more than the asking price. The second was a flat - a third floor no lift - that I was shown over a weekend before it had even been listed for sale by the agency. I offered on the Monday (continent upon being given details of any future installation of a lift) and it had already sold at asking price. Lift or no lift.
I also saw a flat in Malasana, having been the first person to call the owner. I visited over lunchtime the following day and the seller had had four visits and four subsequent offers. While not suitable for me, it was interesting, being a corner flat with windows along two sides, and he put it back on the market at a higher price.
It’s its also worth mentioning a couple of the brand new offerings at very top of the luxury market, led by Lagasca 99, a spectacular brand new building in one of the most emblematic streets of the chic Barrio Salamanca. Comprising 44 apartments and penthouses, the latter with private pools and panoramic views, the development has a private gym, rooftop pool and indoor pool, and even a private members hangout, The British Club. Here prices per m2 are from 10,000 to 14,000 a square metre though some are more expensive - with a penthouse reportedly selling for over 13 million EUR (over 18,000/m2.) Coming in at between 7,000 and 11,000 EUR/m2 are the 22 homes resulting from of the ‘respectful restauration’ of the recently released General Martinez Campos 19, GMC 19 with its 22 flats and 5 penthouses, gym and 2 pools behind the 1930s facade in neighbouring Chamberí on the other side of the Paseo de la Castellana. In the Sol area the Four Seaons hotel will open its doors in 2019 in the Canalejas building, and will include 22 Four Seasons Private Residences, a product I was very familiar with from the Four Seasons Residences in Punta Mita, a top quality branded product which enables owners to enjoy all the services of the world class hotel as well as renting them out for income. Prices will start at around 13,000 EUR per m2.
Spain’s property bubble and subsequent financial crisis crisis of less than a decade ago are a certainly a not-so-distant memory in people’s minds here, but commenters point out that, while prices in Madrid are rising at percentage levels almost as those before the crisis, they are still 23% less than before the crisis. (TINSA property appraisers). In addition, construction levels of new homes are nowhere near pre-crisis levels: an increase on the previous year of 15% up to 75,000 in 2017 (Antonio Aguilar, Housing Development Ministry, El Mundo 21 nov 2017) as opposed to over one million in 2006. (Superial Council of College of Arquitects, El Economista May 2017).
2017 was the first year of real recuperation since the crisis and optimism among the real estate agencies and market watchers remains high for 2018 with continuing confidence in the market predicted.