Spain's luxury residential market is experiencing a boom. Climate, infrastructure, quality of life and security are the main reasons why luxury and ultra-luxury homebuyers (over €5 m) choose Spain to live in. Marbella is one of Spain's ultra-luxury epicentres. Specifically, Spain's most expensive per-square-meter is on Marbella's beachfront in Marina Puente Romano complex, reaching €30,000 per square metre. And when the property is good... the sale takes place “off market”, that is, it does not go on sale publicly and takes only between one and three months to sell.
What does this area of Spain have for a square metre to exceed €30,000? Ana Gavilanes, head of Colliers' Marbella office, points out that the beachfront flats are renovated to the highest standards and have been carefully curated in interior design. “Transactions have been closed here for around €30,000/m2. The properties located near the 5* Puente Romano Resort Hotel, its facilities, restaurants, nightlife and social environment, are the epitome of the most select lifestyle on Marbella's Golden Mile beach. These maximums were reached in the second half of 2022. More recently, in the second half of 2023, transactions have been closed for over €25,000/m2 for new-build penthouses in exclusive developments located on the Golden Mile,” says the expert.
According to idealista data, the average listed price, – what the seller is asking for – is €33,379 per square metre in Marina Puente Romano, Marbella.
At these levels, some areas of Spain, such as Marbella or Madrid, have a level of square metre of luxury housing on a par with historic places such as Paris or London. According to the latest report on luxury housing in France by Knight Frank for 2022, the square-metre price in Paris was €21,000. However, it is not the most expensive area in France: St-Jean-Cap-Ferrat (€35,300/m2) or Saint Tropez (€28,300/m2) are in the top spots. And as for London, the average square metre is $30,303/m2 (around €28,000 at the current exchange rate).
The latest annual report on Emerging Real Estate Trends in Europe by PwC and the Urban Land Institute (ULI) indicated that Madrid is third in the ranking of European cities with the best prospects for real estate investment in the coming months. London and Paris take the first two spots once again. Moreover, luxury housing in Spain's capital will experience a 5% increase this year, placing it among the world's main cities where this type of property will become more expensive, due to the significant demand, according to Knight Frank's Prime Global Forecast for 2024.
And Barcelona is also among the world cities where luxury housing prices have grown the most. Specifically, during the second quarter of 2023, high-end properties became more expensive by 1.4% year-on-year, according to Knight Frank.
Where are the most expensive per-square-metre transactions and what type of home?
In recent years, a new concept of super-luxury homes has arrived in Spain called 'branded residences'. This model started in the US four decades ago and has been gaining more and more prominence in Spain, thanks to high-end brands, such as hotels, fashion brands or car giants.
There are currently five developments in Spain, totalling 300 homes, although forecasts point to a growth of more than 300% in the coming years. According to the consulting firm Colliers, supply will reach 1,200 units in four years between 17 developments located in Spain's main tourist centres. Property prices will be increasingly higher: in some cases, they will range between €20,000 and €30,000/m2, well above the €15,500 per square metre price that the Four Seasons hotel 'branded residences' in central Madrid were sold for in 2017.
Colliers assures the most expensive per square metre are generally for 'branded residences' with hotel services, such as the Mandarin Residences in Barcelona or the Four Seasons in Madrid. This also applies to the Fashion Branded Residences in Marbella, although the most expensive per-square-metre operation is for beachfront properties in the Marina de Puente Romano complex, as mentioned at the beginning of the article.
Luxury homes worth over €2 m are mainly in Madrid, Barcelona, Costa del Sol and the Balearic Islands (Mallorca and Ibiza), being the four top destinations for international clients. San Sebastian also stands out and always appears at the top of the most expensive cities in Spain. However, in this city, despite the gradual increase in the number of foreign buyers in recent years, the main target audience is Spanish residents of the area.
How long does it take to sell a luxury home in Spain?
Twenty-one per cent of the homes sold through idealista during November had not even been on the market for a week, according to a study published by idealista, the real estate marketplace in southern Europe. Another 10% took between a week and a month to sell, 23% between one and three months, 33% had been there between three months and a year, and 13% had been there for more than a year. That is, the majority took between three months and a year to sell, although in the capitals, “express sales” are more frequent, especially in large markets.
In the case of luxury housing, Luis Valdés, residential director at Colliers, points out that it takes between three and six months, but if the product is very good, it does not go on sale and can take between one and three months. “For properties over €5m, it can take up to six months or more, it all depends if the location is 5* and the product meets all of the potential buyer's characteristics. The increase in prices due to the limited supply of luxury homes means that the timescale is not decreasing as the sellers of this type of product know the market value and are demanding in terms of price and accept little negotiation," adds the managing director for residential at Colliers.
What is the typical luxury home buyer profile?
Colliers assures that the typical profile depends on where the home is. On the Costa del Sol, the buyer profile is over-55s, foreign, buying a second residence for long periods. There are more and more younger buyers, aged around 45 with families, who decide to move to Marbella and surrounding areas attracted by the Mediterranean climate and lifestyle, the existing international educational offer and, of course, the high levels of citizen security and quality of public and universal healthcare. “We estimate that, on the Costa del Sol, four out of every five sales and purchases of luxury homes are carried out by foreigners,” says Ana Gavilanes.
In the case of Madrid, those who buy homes worth between €2 and €3.5 m are Spaniards looking for a first or replacement home. In homes worth more than €3.5 m, an international profile appears, who are buying the home as a second or third residence with an investment purpose motivated by the ever-low prices of the capital compared to other European cities, such as London or Paris, and the quality of life and security compared to their countries of origin.
What you can buy with $1m in Madrid, Ibiza, Marbella and other luxury destinations
Knight Frank's latest 'Wealth Report 2024' on the luxury market reveals what $1m can buy in the most expensive real estate markets in the world. Prime housing prices remain high in Monaco, Hong Kong and Singapore, where $1m can barely buy 15 to 30 m2 of luxury property. In Spanish destinations, the values change from 96 m2 in Madrid to just 50 m2 in Ibiza.