By Virginia Fernández.
“Madrid is a cosmopolitan and safe city, with a more than acceptable standard of living and an enviable climate”, outlines José Faría, Knight Frank’s Luxury Residential Director. Hence why overseas buyers are increasingly being drawn to the city.
As the chorus of one of the most famous chotis (traditional music and dance in Madrid) goes, written by Agustín Lara, “Madrid, Madrid, Madrid, the amazing part of Spain where I was born…” The truth is that Madrid really is something special. And this is what the rising number of overseas buyers that have started to show an interest in Madrid must also think.
“Madrid is a cosmopolitan and safe city, with a more than acceptable standard of living and an enviable climate”, points out José Faría, Knight Frank’s Prime Residential Director. Hence why overseas buyers are being increasingly drawn to the city. Furthermore, even though prices in the prime housing sector have been climbing by an average of 5% y-o-y in recent years, Madrid is still a far cry from cities such as London and Paris, where prices are largely unattainable. “Our market is highly competitive, with a truly high quality prime supply,” says Faría.
It really is as simple as that! Neighbourhoods such as Salamanca, Jerónimos, Chamberí and El Viso are the go-to areas for overseas clients. According to José Faría, “the areas buyers choose is partly related to their nationality. For example, Latin Americans prefer specific areas of the Salamanca neighbourhood, streets such as Jorge Juan, Serrano and José Ortega y Gasset are the preferred choice; however, some Europeans prefer the peace and quiet offered by areas such as El Viso and Jerónimos”. Although there is no hard and fast rule, this is true in many cases.
Another interesting fact that we have learned about our overseas clients is that whereas a few years ago they were more interested in existing housing, they are now increasingly opting for new-build developments. “However, it is also true that a few years ago there was barely any prime new-build supply in Madrid, meaning there was very little to choose from. Now, there is extensive supply in almost all districts, allowing both overseas and domestic buyers to discover a whole new product range, one that they were unaccustomed to seeing in Madrid” points out Faría.
“We haven’t even touched on the legal and social assurance that the city offers, nor on the strength of the currency yet” adds the Knight Frank Director, “these are non-negotiable boxes that must be ticked before any overseas buyer even considers investing in Madrid”. Let’s take Venezuelan investors as an example. The dollar has experienced increased volatility recently, meaning euro-based investments both make more economic sense and are more stable than they were 5 years ago, given the euro-dollar exchange rate. “We have noticed a change in trend among these buyers, who are no longer investing in second homes just for occasional visits, but rather in order to make it their permanent residence so that they can enjoy the Spanish lifestyle and even send their children to Spanish schools”, says Faría.
Furthermore, the fact that they can walk down the streets of Madrid without needing to worry about private security is key for them.
“Madrid, Madrid, Madrid, Mexico yearns for you, for a taste of your open-air dances, for all those good things …”