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Constanza Maya, Head of Operations, Expansion & Support, explains the real estate trends for 2019

What role do you play within Engel & Völkers? 

Up to 2019, I've been responsible for the expansion and support of all the licenses in the Iberian Peninsula. My team is in charge of franchise sales and is offered comprehensive support to assure it has the fastest growth in the shortest possible time. This is why the Regional Managers team has focused on development, support, benchmarking and sharing best practises. 

Since 2019, as the Head of Operations, I have dedicated most of my time to the development and growth of my latest operations centre: the Market Centre of Lisbon (MC). Actively running since September, this is our biggest challenge for this year. A booming market not only in the number of transactions, but also in the continuously rising prices that have attracted fierce competition. 

Finally, my other tasks for 2019 will be to act as a connection point for the Private Office in Iberia. Private Office offers support to our VIP clients with the help of the most expert advisors. 


Do you foresee a good year for the luxury property market? 

2018 was expected to be a year of significant growth for the brand in this area of Europe and, fortunately, it has not disappointed. It should be noted that not only the first and second residence has had good results but, even the third residence has shown great progress over the last few years. This proves that we are in a cycle of economic prosperity. Access to loans has facilitated the purchase of more expensive properties compared to previous years. 

The most luxurious coastal resorts have continued to show average price increases although the number of homes purchased tends to consolidate.

Portugal - Constanza Maya, Head of Operations, Expansion & Support

House prices in Spain and Portugal have shown considerable increases during 2018; Can we expect the same trend in 2019?

We are optimistic because when the economy is healthy, the prime real estate market is also healthy. We hope that economic prosperity lasts beyond 2019, although there is always the notion that the luxury market is the least affected during the crisis.

What will be the main economic challenges for Engel & Völkers in 2019? 

When talking about growth in 2018, we can only hope for the same this year, because although growth has been the general trend, it is not balanced so it is imperative to understand when prices are going to reach a ceiling. 
Being in a prosperous economic cycle that is presumed to be extensive for the whole of 2019, pending the possible changes in European interest rates, this does not imply that the increase in the number of purchases and property prices is the same throughout the territory. Thus, cities such as Barcelona and Valencia, which greatly rely on foreign customers, will see prices and purchases grow more moderately. The same will happen in Madrid later in the year but not in the periphery or smaller towns. 
A very mature market like the one in the Balearic Islands with very high prices will face a reduction in demand that will move to other more accessible coastal resorts, although they will still be in high demand from high end clients. 
Today, the Spanish and Portuguese economies have a great European interdependence on the economic development of countries, such as Germany, the UK, the Netherlands, France and Belgium. The tax regime of the countries that attract luxury property investors along with the tax laws of their country of origin will lead to fluctuations that will directly affect investment in real estate, and even more so when dealing with second home purchases or buy to lets. 

For investors who are interested in the real estate market ... What advice would you give to a person who wants to invest in the real estate sector? What are the main factors that must be taken into account before buying a property for investment?

This is a really difficult question. In the case of a private individual, the best time will depend on their personal circumstances, but access to mortgage and its interest rate conditions will be the decisive points. Now is certainly a great time to invest, although buy to let properties are not at the most affordable prices to get an immediate return on them but it will be possible to do so in the medium term. 
If, on the other hand, we talk about the profile of a professional investor who wants to get the most out of this business, without having any time limits, he should try to buy when prices are lower and in less central areas. He should choose locations with a potential future, such as in the outskirts of large cities. 
Those who don't want to take risks should consider investing in the centre of large cities to be on the safe side since the properties there tend to give higher returns when rented out plus they sell quickly. On the flip side, the sale price is always higher than in other less stable areas. 
Investments in second homes usually involve an emotional factor and personal enjoyment that add complex variables and can lead to significant returns. 
Therefore, the most important factors to consider when making an investment include the investor's expectations, how much time it takes to make a profit and qualifying for a mortgage. 

Finally ... Engel & Völkers has branches in more than 30 countries ... How much do Spain, Andorra and Portugal offices contribute in terms of profit compared to the ones in other countries?

The Iberian Peninsula is very important for the company. Not only the first property store outside Germany opened in the Balearic Islands, which is where Mr. Völkers lives most of the year, but also Spain was the country where the World's first Market Centre was opened in. After Barcelona's Market Centre, many more were followed, making the Iberian Peninsula a place with the most Engel & Völkers' MCs in the world. 
Currently, the US market is picking up in terms of the number of franchises and turnover, but it has not yet outdone the Spanish market as far as brand contribution is concerned.

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