Spanish Real Estate Market: September 2021 News

Aztec pyramid in the centre of Madrid. 4 Spanish provinces that are most demanded among millionaires. 2 deals worth more than 100 million euros. Learn more about September news on the Spanish property market.
What happened on the housing market in Spain? If you are interested in the Spanish property market, then welcome to our traditional monthly report!

1. Prices in Ibiza are skyrocketing after pandemic

areal view of Ibiza Spain
In Ibiza, demand for large villas rises while prices grow
Ibiza shows several trends that differ from the mainland statistics. Prices are rising faster than in the rest of Spain. Firstly, property prices have already exceeded the maximum reached before the subprime loan crisis by 10.5%.

The peak in prices in the pre-crisis period was recorded in the third quarter of 2008, during which the average cost per square meter of housing in Ibiza was 2355 euro/m2. For 10 years there was a downward trend, and the increase began in 2018 and did not stop even during the pandemic. Currently, the average cost per square metre stands at 2,602 euros/m2 .

  • The largest villas are in demand

Both demand and prices are rising fastest in the segment of villas with 4 or more bedrooms. At the moment 24% of all offers for sale are very large properties and they still do not meet the demand.

  • Secondary market is more expensive and in demand

Secondary market property prices are 2% higher than those of new buildings. There are several explanations for this: it affects the small number of new buildings in areas with high demand, and the desire of buyers to start using property in Ibiza immediately after the purchase.

  • Unexpected top 5 property price leaders

It is interesting to know that price records weren't recorded in some island's glamorous locations. Read about 5 towns in Ibiza that hold the highest property prices, the list will surprise you!

2. 73% of luxury housing stock are in 4 Spanish provinces

Percentage of luxury homes in regions of Spain
Most expensive houses are concentrated in only 4 provinces of Spain
Currently, according to statistics, the real estate market offers 36 368 houses priced from 1 000 000 euros, and more than 6,000 villas over 3 000 000 euros, yet most offers are concentrated only in four provinces, three of which are the coastal capital, and the fourth has become a synonym of ultra-luxury homes. So where exactly should you head to purchase luxury real estate in Spain?

The provinces of Malaga, the Balearic Islands, Madrid and Barcelona account for 73% of all offers worth a million euros or more.

Málaga is the province with the widest choice of this type of property – currently 23.1% of the total market offers expensive homes around Malaga.

It is followed by the Balearic Islands with 22.9%, the Community of Madrid (15.1%) and Barcelona (12%).

Alicante with 9.7% is the fifth province with the highest number of million-worth homes, followed by Girona (4.8%).

The ranking of the main provinces with the most luxurious homes is completed by Cadiz (1.9%), Santa Cruz de Tenerife, Valencia, Las Palmas and Biscay. Santa Cruz de Tenerife has 654 luxury homes, representing 1.8% of the total, while Valencia has 620 homes worth over a million euros (1.7%), followed by Las Palmas with 303 houses worth more than a million euros (0.8%), Biscay (280), Sevilla (240), Guipuzcoa (221) and Pontevedra (201).

3. An Aztec pyramid to appear in the centre of Madrid

Project of a pyramid for the Nacho Cano theatre in Madrid from the 'HORTALEZA' newspaper
Project of a pyramid for the Nacho Cano theatre in Madrid from the 'HORTALEZA' newspaper
The newspaper Hortaleza (Hortaleza – one of the districts of the Spanish capital) reported that soon Madrid will have its own pyramid. It's about a rather large plot of land, which had already been allocated for the ambitious Colosseum of 3 cultures, but the project stalled and the businessman who funded it was arrested for financial fraud.

And now news is coming that the area will finally have its own cultural attraction.
The mastermind behind the project is Spanish musician, composer, and producer Nacho Cano. To coincide with his musical Malinche, they will build a 30-metre high Aztec pyramid with an indoor theatre seating 1,300 visitors. Part of the site will be used for a 400-car car park.

Architects estimate that it will cost 8 million Euros to build the pyramid and over 11 million to build the entire complex.

This colossal building will host the musical "Malinche", created by Nacho Cano eight years ago. It is a love story of Hernán Cortés and the beautiful Malinche, an indigenous woman of Mexico.

Nacho Cano's company, which requested the opportunity to develop the site more than a year ago, will pay the city council an annual fee of 450,000 euros to use the land for four years.

And while some residents in the area rejoice that the abandoned site with stray dogs will be in use, others are outraged by the project.

"It's an insult to the many other cultures that live in the city that don't have the same support from the city council and community," said Más Madrid's spokeswoman Rita Maestre this summer. The history of the Spanish conquest of the American continent is now being revisited and reinterpreted. And the love story created over 8 years ago by Nacho Cano is now seen by many as offensive to the continent's indigenous peoples.

Despite this, predictions suggest that the musical Malinche, about which a documentary was recently released on Netflix, will still take place within the walls of the new pyramid as early as 2022.

4. 2 September deals with worth over 100 million euros

Bird's eye view of Blau Portopetro Beach Resort & Spa in Porto Petro, Mallorca
Bird's eye view of Blau Portopetro Beach Resort & Spa in Porto Petro, Mallorca
In September there were registered 2 deals in Spain worth more than 100 million euros.

  • Build to rent in Madrid

Buyer: Greystar
Seller: Acciona
Price: 120 million euros

Acciona Inmobiliaria was selling its most popular build to rent building. Greystar paid € 120 million for a project to build 455 apartments with 1 and 2 bedrooms. Also on the site there will be a 13-storey building of 24,793 m2, which will be the largest building for rent, currently existing in Spain.

All the houses will be located within the M-30 ring, with direct access to the city centre via the public transport and roads. The majority of the buildings are expected to be finished by 2024. The community will also have internal infrastructure, including co-working areas, a cinema, gym, restaurant, swimming pool and public spaces.

  • Luxury Mallorca hotel Blau Portopetro Beach Resort & Spa in Porto Petro, Mallorca

Purchaser: Ikos Resorts
Seller: Purple Group
Price: 110 million euros

Ikos Resorts is buying the five-star Blau Porto Petro hotel from Grupo Roxa for €110 million. According to information sent out to the media, the new building will undergo a major refurbishment that will last until it reopens in April 2023.

The facility is close to the Porto Petro marina and the Mondrago Nature Park, in one of the island's most unspoilt natural areas.

Blau Porto Petro has 319 rooms, but after the renovation the room stock will grow to 115 more apartments for a total of 434. The hotel complex will also have six restaurants, a spa and a huge 10,000 square metre sports field.

Luis Ero, CEO of Ikos, comments on the deal: "We are confident that the new project will be a great success for Ikos Resorts. Mallorca is one of the most iconic destinations for tourism and the exclusivity of Porto Petro gives us an unbeatable opportunity to give customers the pleasure of a paradise lifestyle in this destination and provide them with top-notch tourism products."

5. Developers invest in retirement homes

older man and older woman playing video games
Big investors are coming to the retirement home market in Spain
Belgium's largest developer, Cofinimmo, has launched two retirement home projects in Spain.

The company has closed a €9m deal to acquire a 5,000m2 building with 104 rooms in Bilbao. The home will be managed by Cofinimmo's subsidiary Orpea Group.

It has also acquired a site for the development of a home for the elderly in Alicante. The investment in the current phase is estimated at €13 million. Work is expected to start as early as 2021 and the 7,300m2 building, which is designed to house 150 residents, will be completed by early 2024.

Jean-Pierre Hanin, CEO of Cofinimmo, explained that with this investment they aim to strengthen their presence in Spain.

As the country with the highest life expectancy in Europe, Spain attracts a significant number of Europeans looking to move here for retirement.

Not surprisingly, big business is the first to see prospects and to develop a network of homes designed exclusively for retirees (homes for the elderly).

There are now 382,000 places on the Spanish market in 5,500 residences, 60% of which are private. Investors are actively developing new projects in this segment over the next few years and expect the number of places to reach 407,000 by 2024.

6. Section 28 of the Mortgage Act, which restricts the sale of an inherited house, has been removed

Woman signs documents while sitting at table
You can now sell an inherited house in Spain straight away
According to a report by Fotocasa, 59% of people under the age of 35 are currently looking to rent a home, 5% more than a year ago. Meanwhile, 27% interact in the sales market, 4% less than in August 2020. Finally, 14% are involved in both.

The main reasons for choosing to rent, according to the report, are the weak economic situation (52%), the flexibility provided by renting (31%), and job mobility (30%).

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