The end of the year is approaching and so much is happening that before we launch our Christmas Newsletter with market trends and updates, we have to give you a quick pre-view of what we are seeing in the Luxury Country Property Market in Andalusia. In today’s edition we lay a specific focus of the effect of the latest elections in the United States on the market in Spain.
The Reason Behind the Increasing Price Trend
It is undoubtable that since 2019 the luxury country property market in Andalusia has completely transformed. Ever since the pandemic, we are experiencing an ever-increasing growth in price. Spain, and specifically sunny Andalusia, is becoming one of the most sought-after regions to invest for affluent buyers. Portugal, Italy and France have always been “competing” countries, but the numbers don’t lie.
Looking specifically at the niche market of Villas & Fincas, focusing on the sale of a unique and luxurious product. Country Properties with character, typically above 800.000€. Different market reports reveal that there is an approximate increase of 30% in prices over the past 5 years. How can it be?
- Increase in demand. Buyers from across the world are experiencing a stronger desire to invest in the luxury country property market. Having a residential home with a larger plot, where they have more privacy and space to enjoy nature is key right now. Especially since the pandemic, the need to escape outdoors has turned out to be a driving factor in the country property market in Andalusia, Spain.
- Limited Supply: The supply in the luxury country property market in Andalusia is relatively limited. There are many rural properties for sale, but the gems in the market are scarce. Finding a beautiful country property in Andalusia in the right location, with a good quality build, the right finishing, and in a good location is resulting to be difficult.
- Infrastructural Development: Some years ago, investing in a rural property in Andalusia might have been more of a jump to an “alternative lifestyle”, since the access was poor. Contrarily, nowadays, the improved infrastructure, including better roads, transport links, and amenities, has made rural areas more accessible and appealing to buyers. Now, you can opt for the quiet rural lifestyle, and have easy access to the best restaurants and shops.
- Digital Nomad Culture: An increasing number of high-net-worth individuals are embracing remote work, allowing them to invest in properties where they can enjoy a high quality of life while working remotely.
The Effect of the Global Economy on Sales Prices
The global economy directly influences the luxury property market in Andalusia. Key factors include:
- Economic Growth: Strong economic growth in Europe and the United States enhances the purchasing power of high-net-worth individuals, increasing demand for luxury properties in Andalusia.
- Interest Rates: With interest rates at historic lows until recently, financing luxury property purchases became more accessible, leading to a surge in buying activity. However, rising interest rates may slow down this momentum.
- Currency Fluctuations: The strength of the Euro compared to other currencies, particularly GBP and USD, impacts foreign investments. A weaker Euro can make properties cheaper for overseas buyers, boosting sales.
- Inflation and Cost of Living: Escalating inflation may deter some potential buyers due to increased living costs, but at the end of the day, the luxury country property market often remains resilient, with affluent buyers less affected by economic downturns.
Who invests in the Luxury Country Property market?
The luxury country property market in Andalusia attracts a diverse array of international investors. We have been in the market for over 2 decades now, so we have seen so many different nationalities come and go. But one thing is for sure, 90% and more have always been foreigners. The Spaniards invest in the luxury country property market too, but they tend to move in their own circles.
One of the most popular group of investors in the countryside in Andalusia are the UK citizens. Since the 60s approximately, the Brits were influenced by the unique lifestyle of Andalusia. Although, lately, in the last decade approximately, a new leading group began to emerge. The Scandinavians, the Germans, the Dutch and the Belgians were marking their footprint on Andalusian soil. This group of foreign buyers have been determined to find an Andalusian country property and turn it into their second residence.
Due to the quality expectations of the latter group of investors, we have seen that in general, the quality of building & finishing of the country properties for sale now in Andalusia is also improving tremendously. This is yet another reason why the prices in the luxury country property market are increasing.
North Americans and Middle Eastern Buyers have always been active in the market, but less predominantly. But a third wave of investors has been winning an important position in the luxury market in Andalusia. Since the last 2 years many affluent buyers from Eastern Europe are making the move to Spain. Either to move permanently or to buy a second or third residential home.
Andalusia is home everyone, creating a beautiful mix of cultures, where everyone comes to enjoy the same thing. The simplicity of life. Coming to enjoy the warm sun rays all year round, coming to enjoy the fantastic gastronomy, enjoying the warmth of the people, etc.
The Impact of Donald Trump’s Election on the Real Estate Market
The latest report of the James Edition Journal has left us some interesting data since the most recent elections in the United States of America. Since Trump was re-elected, real estate in Spain has seen a 45% increase. Next to Spain, there are many other countries that are seeing similar or more drastic results, so we can all expect to get a new wave of American citizens looking to invest in luxury real estate.
Following the election of November 5th, Spain has won a place in the Top 10 ranking of global destinations where US citizens intent to invest in Luxury Real Estate. The top 2 motivations to invest are lifestyle and investment appeal. Spain has ranked the 5th position, after the UK, Costa Rica, Ireland and Portugal. For Spain there has been an increase of 59% in searches.
Seize the moment!
This is the moment! Luxury properties are scarce and the prices don’t seem to be going in a downwards trend. So, if you have seen something you adore in our Luxury Country Property Market, then seize your opportunity! Contact us for more information and let’s organise a viewing.
Call us on +34 608 577 696 or send an email to [email protected].
Danielle Ernstsen | 3rd December 2024
