Bull Market
Spain’s luxury real estate market shows no sign of slowing down.
Print
Email
Bookmark
ShareFebruary 1, 2008
As Europe’s third largest country, Spain possesses all of the cultural and architectural grandeur of its neighbors—along with dramatic coastlines, spectacular mountains, quaint villages and modern cities featuring some of the continent’s most forward-thinking designs. The country is home to three-star restaurants, countless cultural festivals (the throwing of the tomatoes in Bunol rivaling the Running of the Bulls in Pamplona) and an enviable Mediterranean climate that hovers around 75 degrees year-round on the coasts.Nearly 10 percent of Spain’s 45 million occupants are
foreigners, many of them expatriates, retirees or second-home owners. There are
no restrictions on who can own real estate, and property taxes and buyer fees
are relatively low. In addition to a 10 percent deposit, there is a 7 percent
property transfer tax, and broker commissions are generally between 4 and 6
percent.
However, Spain’s allure is hardly a well-kept secret, and its
popularity might contribute to its undoing. A rash of articles that appeared
early last year declared that the Spanish housing bubble had burst.
Approximately 800,000 new housing starts were in the works for 2007, but
according to reports, demand was expected to flatten out at about 600,000
homes.
Still, brokers in the top tier of the market are not worried.
"The luxury market is different," says José Ribes Bas, a broker with Rimontgó
Real Estate in Valencia. "People who want to buy a second or third home are not
affected by mortgage rates."
Forgoing established regions such as the Costa del Sol—a glitzy
swatch of beachfront suggestive of Miami—for lesser-known spots can yield some
promising results. "Customers should not look for inexpensive properties, but
they can look for prestigious properties," says Artur Stabinski of Barcelona’s
Fincas Exclusivas, the local affiliate of Christie’s Great Estates. The
Catalan-speaking provinces of Barcelona, Majorca and Girona have topped real
estate’s most-expensive lists, while the less-traveled Costa Brava and Valencia
attract buyers with their low-key beauty.
The 1992 Olympics put Barcelona on the map, and the real estate market has been maturing and expanding ever since. Famous for being a cultural hub—evidenced by the numerous different languages spoken on the street and the spectacular drip-castle architecture of Gaudi juxtaposed against the clean lines of Richard Meier’s Barcelona Museum of Contemporary Art—Spain’s second largest city is seeing a surge of luxurious renovations of 19th- and early-20th-century buildings.
Currently, the Passeig de Gràcia is the hot spot, and one of
its most popular and expensive new offerings is PG45. International developer
Hines purchased the 1879 building in 2004 and transformed it from offices to 16
apartments and three duplex penthouses. (Barclays Bank still occupies the bottom
four floors.) The apartments start at $1.9 million, and one penthouse recently
sold for $11.8 million. Because of the large number of foreign buyers—Hines developer Arturo Diaz
says many are Russian, Australian or British—the 24-hour concierge service
is the most coveted of PG45’s many amenities. "They can talk to or e-mail the
concierge, and he will arrange to do everything from pick up residents at the
airport to turn on the heat before they arrive," says Diaz.
