Carrie Frais, Head of Marketing & PR, Lucas Fox.
This year Lucas Fox celebrated 10 years in business. It has been a decade during which the company has witnessed huge changes in the Spanish property market. When Lucas Fox was launched in 2005, the market in Spain was approaching its peak but as we all know, there ensued an almighty crash from midway through 2007 to around midway through 2014 where prices began to level out. During this 7- year period of tumbling prices, the focus was on high end overseas clients looking for exclusive properties in prime areas of Spain. But, during the last 18 months or so, with prices 40% below their peak, the economy back on track and banks willing to lend again, confidence has returned to the market. We’re registering significant numbers of investment clients as well as increasing numbers of national buyers.
Our latest market report for the first half of 2015 reflects this, showing that the number of high-end clients buying property for investment purposes in Barcelona doubled in the first half of 2015. In Madrid, 60% of Lucas Fox clients who bought homes with a value of more than €900,000 did so for investment purposes. The ratio of wealthy clients buying Barcelona investment property doubled from 30% in the first half of 2014 to 60% in the six months of 2015.
For the first time, our in-house reports also include data from buyers purchasing mid-range properties from €400,000-€900,000. In this price range, a third of all buyers purchased property for investment purposes with the same proportion buying as a primary residence, a significant rise on last year. This again reflects the growing numbers of local buyers coming back to the market, traditionally a sure sign that the recovery is underway.
In its European attractiveness survey, Comeback Time, accounting firm Ernest & Young put Barcelona and Madrid among the top ten cities for investment in 2015 alongside the likes of London, Paris and Berlin. The growing number of property purchases is expected to be one of the key drivers of economic growth in Spain, which has already surpassed forecasters’ predictions.
According to Spain’s Land Registry, El Colegio de Registradores, foreign buyers accounted for 13% of all purchases in Spain in the third quarter of 2015, the same figure as during the whole of 2014. Significantly, El Colegio de Registradores also states that a fifth of all foreign property sales were by British investors, who, as we know, are traditionally lovers of all things Spanish. This figure is up from 16% during 2014. It seems low interest on UK savings accounts, high housing costs and the strong pound have all been catalysts in luring Brits back to the Spanish property market.
In response to this growing demand for investment products, we decided to establish a new business ‘Lucas Fox New Developments’, turnkey homes that offer higher-than-average rental yields and a good return in the long term.
It is currently focused on Barcelona & Madrid as well as in and around Marbella. Lucas Fox New Developments will expand to incorporate other regions such as Ibiza, the Costa Brava and Valencia in 2016. Watch this space!