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The luxury new-build property market in Madrid

The first half of the year is closing in with stated growth in the real estate market. The new-build developments have been especially favoured by the scarcity of supply and very high demand. To better understand the current situation in this sector, Óscar Larrea, the new-build property director, will enlighten us further:

What is the health status of the luxury new-build market in Madrid?

The current situation in the two large capitals is unbeatable. The demand is much higher than the current supply especially in Madrid and prime zones due to scarcity of land. The main interest is focused on old renovation buildings, which entails an increase in the costs of construction / renovation. In addition to the above, prices have risen by 30% in areas such as Salamanca and Jerónimos and between 15-20% in Madrid's less prime zones: Chamberi and Chamartin.

Madrid - Obra Nueva en El Viso-Engel Voelkers.jpg

Foto: © Engel & Völkers Madrid

Do all the construction projects that are re-starting in Madrid consist of building renovations?

New construction permits in Madrid had an increase of almost 19% during the first quarter of 2017 compared to the same period in 2016. During 2016, the increase was almost 30% compared to the previous year. Out of the total number of permits until March, 14,848 were for high-rise flats and 5,111 were for single-family homes, with an annual increase of 16.7%. In 2016, permits were increased by 28.9% after they did so by 42.5% in 2015, thus consolidating a recovery that started in 2014. The types of projects initiated are different, depending on their situation.
In Madrid's neighbourhoods like Chamberí, Salamanca, Retiro and Centro, the great majority of the properties for sale have been for old buildings that require renovation. In areas like Chamartín, Arganzuela and Tetuán, the renovation projects for sale are on undeveloped plots of land. On the outskirts, the situation is the opposite: Sanchinarro, Las Tablas, Montecarmelo, Boadilla del Monte, Rivas, Getafe, Alcalá de Henares, Villaverde and Ensanche de Vallecas are the areas with more urbanised land and where more supply currently exists.
You can see the latest property offers that Engel & Völkers has on our newly launched website:

Madrid - Obra Nueva en El Viso- Engel Voelkers

Foto: © Engel & Völkers Madrid

Who are the customers that are buying these properties? What is the buyer's profile?

In prime areas of Madrid's capital, the customer profile is mainly international: Mexican, Colombian and Venezuelan. They are interested in investing in luxury new-builds, with prices of between 8,000-12,000 euros / sqm.
We must note that the national customer seeks properties for sale on the outskirts of the city. These are mainly detached houses with prices between 300,000-600,000 euros and high-rise flats between 150,000-500,000 euros. Top-floor flats remain the objects of desire in Madrid's real estate market.

Madrid - Obra Nueva en Ciudad Lineal-Obra Nueva

Foto: © Engel & Völkers Madrid

Could you provide us with information about the sector?

These are the data taken from Madrid's Fomento about the total number of transactions:

Year        Transactions Total value       Total area

2016         34.554           7.007.406.487     3.071.671  

Q1 2017    8.698            1.945.710.430        795.254 

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