According to the latest reports on housing in Spain, the average price continues to rise. But this does not mean that certain luxury homes have not experienced a price drop last month or do not have the potential to sell for less. This situation takes place in large cities such as Madrid, where some flats are already at almost the same price as some years ago, when the urban boom took place.
This happens in very specific areas of the capital. In this way, not only the highest-purchasing municipalities lead to higher prices, but also the downtown districts where there is hardly any new builds: Retiro, Salamanca, Chamartín, Chamberí, Madrid's Centro, etc.
What is the main cause for this price drop?
Housing covers a very large market, however, most of the sales are concentrated in certain places. In fact, prices have always been higher in neighbourhoods such as Recoletos, Castellana, Almagro, Jerónimos, Viso and Justicia.
During the big housing crisis, these areas suffered to a lesser extent the misfortunes generated by the bankrupt construction companies, the fall in prices and the overwhelming decline in the number of homes sold.
In this way, the housing market's recovery has also been quicker. In addition, there is the law of supply and demand, a basic principle that has taken care of the rest. That is to say, in these areas we have a high demand compared to the low supply. On the other hand, there are new homes, which are also increasing the average prices.
There is a clear disparity between the different neighbourhoods or districts of the capital. The market is diverse and heterogeneous, giving rise to a price development that has to do with property normalisation. During the housing bubble, the differences between the disparate neighbourhoods of the capital began to narrow down more and more, thus destabilising the market equilibrium. At present, the situation is subsiding and everything is returning to normal.
Which buyer profile prefers resale homes over new-builds
You might think that the reason is based on the preferences of each buyer, either by the size of the property or the type of construction. It could also be explained very easily depending on the location, like the buyer wants to live in a specific area, where there are no new homes available.
The truth is that there is no clear differentiation between clients who want new properties and customers who want resales. At Engel & Völkers, it is common to come across potential buyers who prefer more new built homes than clients who want resale houses or flats.
The new built houses are more modern, have better finishes, greater energy efficiency and need less work. However, those interested in resale properties value the immediate availability at the time of collecting the keys to the house, its reduced price, the wide variety of existing alternatives and the location.
The profile of the Spanish buyer is between 35 and 50 years of age. He is a father of a family and prefers to live in a large city. According to the studies carried out, when looking for a property, this type of buyer prefers flats, followed not very closely by villas and, finally, by semi-detached houses. In addition, their order of preference usually coincides with the type of housing in which they currently live.
Luxury homes that offer a significant discount
These are some of the properties that have experienced price decreases last month: