So, have you decided to sell your property in Madrid, Spain this year? We can understand why you may want to sell your apartment in Madrid – 2016 hasn’t really been a great year for Spain or the Spanish property market.
It all began with the general elections of December 2015 which threw up a fractured mandate with four political parties getting an equal number of seats in the Spanish parliament. None of the four parties liked each other, so they failed to throw up a coalition government even though it had been 6 months since the election.
Eventually, the King of Spain, Felipe VI was left with no choice but to dissolve the parliament and call for a fresh election, to be held on June 26, 2016. This is certainly not good news for the Spanish property market.
Investors don’t like political instability and uncertainty. Nobody knows who is in charge of Spain. Spain has a very weak caretaker prime minister in Mariano Rajoy, who has literally no powers. So, there is nobody in control in Spain, which means no decisions will be taken on anything.
The policy paralysis, which began in December, 2015 is set to continue, at least until June 26, 2016. If the next election throws up a fractured mandate like the last one, with none of the political parties in a position to form a government, only the worst can be expected. Indeed, one would expect property prices in Spain to collapse if something like that was to happen.
Even Madrid, one of the greatest cities in the world, a city of the rich and powerful, won’t be immune to this. Yes, the fall in property prices in Madrid will be a lot less compared to the rest of Spain, but it cannot be denied that the property market here will be affected too.
Indeed, the housing market in Madrid has been riding high on a successful couple of years. 2014 and 2014 saw prices of apartments in Madrid rise to new highs, reversing the losses suffered in the aftermath of the 2008 recession.
Indeed, property prices in Madrid rose by 4% last year. As Mark Stücklin, of Spanish Property Insight says in an interview with New York Times, “Madrid is the capital, the big city, the biggest, most liquid property market in the country,” Mr. Stücklin said. “Apart from demand from locals, it also attracts outsiders who want all the services, which other places in Spain can’t offer.”
So who buys properties in Madrid? Madrid has always attracted the richest people in Spain, but today a number of foreign buyers are active in the housing market in Madrid. There is a lot of interest in Madrid today, with investors pouring in from all over the world, especially wealthy individuals from China, Russia, Brazil and Eastern Europe.
Real estate firm Knight Frank claims that 30 percent of its sales in Madrid were made to international investors. In the past, British citizens were the most prominent buyers of Madrid properties. Today, there are a number of international buyers from Spanish speaking countries such as Mexico, Venezuela and Colombia.
There are a number of Spanish expats who are moving to Madrid as well, according to Mark Stücklin, who describes this new set of buyers as “Spanish expats who have been living abroad for years, and think now is a good time to invest in Spanish real estate.”
The wealthy individuals from these countries consider Madrid to be of great value and a safe haven for their investments, compared to their own nations.