Spain’s luxury real estate market is currently experiencing a high point, partially thanks to the influx of younger generations. In fact, millennials, those born between 1981 and 1995, now account for 25% of all transactions involving luxury homes priced at over three million euros, according to the First Luxury Housing Market Report in Spain by Hiscox, an insurance company specializing in solutions for high net worth individuals.
What’s even more significant is that their presence in the market is expected to continue growing, with this generation, alongside Centennials (born between 1996 and 2010), projected to represent over 60% of luxury buyers by 2025. Furthermore, their spending power is set to grow three times faster than that of other generations.
These young millennials are digital natives, highly connected, and deeply committed to social and ethical values. Their primary professions are often related to healthcare, science, research, and technology. They prioritize quality of life above other interests, which is reflected in their preference for newly built or recently renovated high-quality homes. They seek flexibility in design and a connection to nature, along with both physical and technological connectivity. These are the key factors that will define luxury housing for the new generations. However, currently, Generation X (born between 1961 and 1980) continues to dominate luxury property purchases, mainly due to their higher purchasing power, as reported in the study.
An International Buyer
In Spain, the number of millionaires in 2022 exceeded 1,130,000. However, the majority of clients seeking luxury homes priced at over three million euros in Spain are international buyers. They are looking for either a secure investment or, alternatively, a second residence to spend a few months of the year. According to the report, most of these investors come from European Union countries, primarily Germany, the United Kingdom, and France. In recent years, buyers from North America and the Middle East have also entered the Spanish luxury mansion market.
Malaga, Favorite Destination for British Investors
Malaga province not only leads in this segment, housing 34% of all luxury homes in Spain, but it is also reported that 90% of purchases in the area are made by foreigners, primarily seeking a second residence. Thus, it remains the ultimate destination for British buyers, who, despite Brexit, continue to represent the majority of foreign buyers in the province, accounting for 20% of transactions. They are followed by the French, Swedes, and Belgians, and increasingly, German, Austrian, and Dutch investors are standing out. In the La Zagaleta area, one of Spain’s main sub-markets, Arab buyers stand out, alongside British, German, Scandinavian, and Russian buyers.
Regarding domestic buyers, residents of Madrid are the main purchasers of luxury homes in Malaga, especially in Marbella, where they have sought to establish their primary residence since the pandemic, taking advantage of remote work flexibility. In terms of age, the typical luxury property investor in Malaga falls between the ages of 40 and 55.
Madrid, a City Led by Spanish-speaking Investors
In Madrid, which houses 10% of all luxury homes priced at over 3 million euros, it is challenging to pinpoint a single buyer profile. However, Latin American investors continue to be the main players in the capital. The nationality and profile of the buyer vary depending on the area of focus. In the Salamanca and Almagro neighborhoods, Mexican and Venezuelan investors predominate, seeking to establish themselves near the most exclusive shopping areas of the capital. In Retiro, on the other hand, domestic buyers looking for homes for personal use stand out. El Viso sees an abundance of European diplomat families, while La Finca attracts the “new rich” profile, both domestic and international, including media figures such as athletes or entertainment industry celebrities. In La Moraleja, the typical buyer is also predominantly domestic, with a large number of successful professionals from the business world, as well as television celebrities, famous athletes, or renowned artists. In terms of age, the typical buyer of properties priced at over 3 million euros in Madrid generally falls between the ages of 40 and 50.
At Dust and Sand Luxury Homes, we are attentive to these changing trends and committed to meeting the needs of diverse buyers looking for luxury properties in vibrant Spanish cities. If you are interested in exploring opportunities in the Spanish luxury housing market, please do not hesitate to contact us. We would be delighted to assist you in your search.
Published by Dust and Sand Luxury Homes on September 27, 2023
