The Madrid Property Market For SalesWhile many would say that there has not been a recent “normal” year to describe property for sale in Spain, the first half of 2011 had its’ own unique reasons for being out of the ordinary. In addition, Madrid real estate has specific property market characteristics that also influence local sales. Both national and city factors resulted in the following Madrid property prices for the first half of 2011 was:
- The average price for Madrid real estate in the first half of 2011 was €3.575 per square metre.
- Amongst luxury properties in Madrid, the average price of Madrid property was €4.315 per square metre.
- The Salamanca district recorded the highest property sales prices at close of the second quarter of 2011.
Information about the Madrid property market can be used when assessing currently available luxury property in Madrid. Lucas Fox currently has 13 luxury properties for sale in Madrid.
Key Influences: The Spanish Property Market
The end of December 2010 brought in changes to the taxation of Spanish mortgages. These changes removed financial incentives that had been an influencing factor for some Spanish residents, and as a result, the first half of 2011 was a fairly lacklustre six months for real estate Spain. Some specific markets – like luxury property and elements of commercial property investment – were independent of this macroeconomic context, but for the everyone else, the changes to mortgage tax relief delayed residents’ decisions to look for property for sale in Spain.
“The slowdown in the Spanish property market at the lower end of the market is partly due to the introduction of new mortgage taxation laws but also due to the lack of finance available to buyers”, explains Alex Vaughan, Lucas Fox Director.
These two key influences on property for sale in Spain are clearly evident in data for the first half of 2011.
Key Influences: The Madrid Real Estate Market
For Madrid, particular segments of the Spanish property market proved resilient to the wider influences:
- Luxury property for sale in Spain
- Commercial retail properties, and
- New housing developments in the districts of Tetuan, Puente de Vallecas and Carabanchel.
The Madrid Property Market: January – June 2011
The National Institute of Statistics data on property transfers of Spanish homes shows that for the first six months of 2011, there was a month to month drop in sales of urban dwellings in Madrid. Meanwhile, data on Spanish home loans financing by banks shows there was less capital being made available to residents who wanted to buy property for sale in Spain.
These latest pressures on the Spanish property market, and on Madrid real estate prices, added to the already-existent sluggish housing activity. Average Spanish property prices are not expected to start making a full recovery for another eighteen months. This is reflected in the average prices of Madrid real estate which have dropped incrementally (by a total of €200) in the past twelve months.
Unlike average prices, luxury property for sale in Spain has been fairly robust for the first half of 2011, with prices highest in the exclusive neighborhoods of Chamartin and Salamanca.
Keeping Up With The Latest Analysis Of Madrid Real Estate And The Spanish Property Market
A future blog post will examine the rental property market in Madrid: please feel free to subscribe to our blog to be alerted to this rental update.
The next set of Lucas Fox Property Market Reports will be released soon. Like this Madrid real estate summary, these reports provide detailed analysis of the local Spanish property market for the first 2 quarters of 2011 (in Barcelona, Costa Brava, and Ibiza). Subscribe to this blog or email us to be informed when they are available for download. We look forward to your comments about the Madrid real estate market below.