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Luxury housing goes up in gear: where to buy, when to invest and forecasts for 2022

During the first months of the pandemic, real estate investments fell due to closed borders and little mobility. Over time, the real estate market has grown in transactions and the luxury market is experiencing good times. Let's see where it is better to invest and the forecasts that are set for this 2022.

Agents in the sector acknowledge that the health crisis brought real estate transactions to a screeching halt, confinement did not allow visits to properties, the market collapsed and luxury was no exception.

“Uncertainty is the worst enemy in a decision-making process. Will prices drop? Will we enter a stage of economic recession? Will the dire forecasts of the International Monetary Fund be fulfilled? From GDP? Of unemployment rates? These and other issues were resolved in those months with inaction while waiting for answers”, answers Estrella Serrano, director of Living.

price recovery

For his part, Gonzalo Robles, CEO of Uxban, explains that prices were adjusted in all markets, but the declines in the luxury sector have been anecdotal if we compare it with the predictions. “In fact they have served as a catalyst and an incentive to buy. There have been no falls of more than 10%, and in Madrid, for example, it has already been recovered and surpassed”.

From Barnes Madrid they announce that the good economic perspectives offered by the vaccine and the return of foreign capital make it possible to foresee the recovery of a market in which a 3% price increase will be registered during this year, placing the average price of the luxury housing at €6,700/m2 in second-hand properties and €9,300/m2 in new construction at the end of 2021.

The best areas in luxury homes

In Spain, there are several areas that are positioned as the best in the luxury housing market. For the CEO of Uxban, and from a purely urban point of view, Madrid is in the lead by far compared to the rest of the cities in Spain, since it is even among the first places worldwide and has become in a few years a very attractive place for international buyers.

Barcelona is the second market in terms of size, but it has lost a lot of momentum due to its political and legal insecurity. While San Sebastián continues to lead in terms of the highest impact in euros/m2 in Spain, “although it must be put into perspective since it is a very small market with a more regional audience”.

Two cities that are gaining momentum lately are Valencia, and especially Malaga. The latter has been in constant transformation for several years and is becoming a pole for attracting talent that will be reflected in real estate prices.

Is it a good time to invest?

Estrella Serrano is clear that this is an exceptional opportunity to invest in this market. The reasons that explain this optimism are several: international clients are returning, Spain is among the five most interesting countries for real estate investors, young couples are becoming independent after a family confinement that has been complicated, low interest rates and owners receptive to purchase proposals.

For Gonzalo Robles, the Spanish buyer has a defensive and conservative investor profile. “Right now there are no alternatives to invest, due to low interest rates. In addition, taking into account the high rates of inflation that are expected, together with the possibility of borrowing very moderately to acquire a property, make real estate the most important refuge sector in the face of these changes.

In this sense, and when choosing Madrid or Barcelona in terms of investing in a luxury home, Estrella Serrano believes that the prices in these two cities are always among the highest in Spain. “My advice diversify. In the neighborhoods considered "upper zone" prices are almost identical per square meter ".

How will this market behave in 2022?

Although making forecasts is risky, experts say that there are several trends that mark what could happen next year. As for the luxury sector, from Uxban they are clear that, as of March 2021, the market has performed excellently, and this inertia will undoubtedly continue until the end of the year.

“Thus, for the year 2022, the forecasts are also very optimistic, among other reasons because the economy will be supported by the arrival of European funds, and on the other hand, it is not an election year, an appointment that always causes great uncertainty among the investing public.

Estrella Serrano is of the same opinion: “In Living, and after a year without events, we have been present at Csió, an international jumping contest that is held year after year at the Real Club de Polo de Barcelona, ​​and there has been a moment unique, emotional, in which an illusion was breathed that makes us foresee a very dynamic 2022”.

He points out that both buyers and owners have visited them and written their letter to the Three Kings. "We are not sure what will happen, but we are very optimistic about what we think will be an excellent year."