Madrid Prime Residential
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RESEARCH MADRID PRIME RESIDENTIAL AUTUMN 2017 MACROVIEW SUPPLY DEMAND PRICES PRIME RESIDENTIAL MADRID, AUTUMN 2017 RESEARCH Prime residential market GRAPH 4 MACROVIEW Europe on the up? Annual variation in prime residential property prices (%) Although prime residential property prices Spanish economic growth outstrips the were not hit so hard during the crisis, only Eurozone average, and after regaining the now are prices starting to climb. Cities such Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 positive trend seen in previous months, as Madrid (10.7%), Berlin (9.7%), Paris (8.8%) and Dublin (3.8%), have all seen consumer confidence is rising. residential property prices tick up in recent 12% months. 10% Madrid particularly stands out, registering The Spanish economic recovery remains 2017, with the percentage rising to 5.8% “ Cities such as close to 11% growth in Q2. Its high quality 8% in full swing, up 3% in Q2 2017, with for existing housing. Madrid, Berlin, of life, infrastructure, physical and legal consumption, investment and foreign Paris and Dublin assurance, as well as its rich leisure, cultural 6% trade all making a more balanced Although prices are rising across the and educational offering, make it the ideal 4% contribution to growth than in pre-crisis entire country, there are still marked have all seen setting for new projects and put it on a par years. The International Monetary Fund contrasts between the Autonomous with any other major city in the world. prices for existing 2% has indicated that Spain has made Regions. In Madrid and Catalonia, It also offers highly competitive tax and great progress in terms of its economic prime residential property maintenance advantages for new-build housing prices rose by 7.6% 0% recovery, with growth forecast to outstrip properties rise in international buyers. and 7.8% respectively over the past the Eurozone average, and the country -2% 12 months, whilst the price of existing recent months. well-poised to tackle the remaining In light of the macro data presented above, homes climbed even more, up 9.5% However, with challenges, such as reducing structural we can safely say that rather than another -4% y-o-y in Catalonia and 11.4% y-o-y in unemployment and public debt and y-o-y growth of housing bubble, Spain is in the midst of a the Region of Madrid. DUBLIN PARIS MADRID BERLIN increasing productivity. almost 11% in Q2, post-crisis expansive cycle, in which we Madrid particularly expect to see sustained growth, albeit at a Despite the fact that the country is firmly New-build housing prices in the Region more moderate pace over the next year. Source: Knight Frank Research fixed on the road to recovery and that the of Madrid have grown by 39% since stands out from deflation risk has been mitigated, inflation they bottomed out in mid-2013, with its European is yet to reach the European Central existing residential prices also growing GRAPH 3 counterparts” Index of global residential property prices Bank’s target of 2%. This, coupled with by 30.2% since the end of 2013. 55 countries tracked in Q2 2017 (%) However, current average prices are still the euro’s strength against the dollar CARLOS ZAMORA is delaying the ECB from making any unable to break above levels last seen Head of Residential decisions regarding the withdrawal of its in 2011 for both existing and new-build monetary stimulus. properties. Finland Sweden Norway Iceland Denmark Germany Estonia Spanish residential market Netherlands Russia GRAPH 1 GRAPH 2 Canada United Kingdom Latvia Lithuania New-build housing prices Existing housing prices Ireland Poland Czech Republic Ukraine (by Autonomous Region) (by Autonomous Region) Jersey In the current climate of favourable Belgium Slovakia France financing terms and conditions and low Hungary Spain Italy Romania Portugal Turkey interest rates, property investment is Variation between record low and Q2 2017 Variation between record low and Q2 2017 UnitedUnited States States Bulgaria Luxembourg Malta Greece China Cyprus Japan one of the most profitable options for Y-o-y growth rate Y-o-y growth rate Morocco Israel South Korea investors. This is therefore also driving Austria Taiwan India Croatia Hong Kong residential sales and putting upward Mexico pressure on residential market prices. 40% 40% Slovenia Switzerland Colombia Malaysia 30% 30% Sales marketing periods are decreasing % annual variation Singapore in price, Q2 2017 Indonesia and Q2 2017 saw the total number of 20% 20% residential transactions exceed 141,000, Jakarta over 20% Brazil up 14.7% y-o-y, although this is still 10% 10% considerably down on the record 251,000 10% to 20% Australia transactions registered in Q2 2006. 0% 0% South Africa 0% to 10% Chile New Zealand According to the latest data released by MAD CAT BAL CNT PVA AND CAN VAL GAL EXT MUR CLM NAV ARA RIO CYL AST MAD CAT BAL CNT CAN AND PVA VAL RIO ARA MUR NAV CYL CLM GAL EXT AST 0% to -10% the INE for the whole of Spain, new-build housing prices grew by 4.4% y-o-y in Q2 Source: Knight Frank Research | INE -10% to -20% Source: Knight Frank Research. Based on the latest available data. 2 3 PRIME RESIDENTIAL MADRID, AUTUMN 2017 RESEARCH MAP OF PRIME AREAS AVAILABLE STOCK New-build: 12.1% | Existing housing: 87.9% CHAMBERÍ EL VISO SALAMANCA Serrano 85 Chamberí Ríos Rosas Castilla General Oraá 9 Guindalera Claudio Coello Castellana José Abascal 48 Lista Nueva España Gaztambide Arapiles Almagro Lagasca 99 Alfonso X 4 Hispanoamérica Recoletos Trafalgar Goya 63 Goya Fuente del Berro Serrano 141 Ciudad Jardín M. Glez. Longoria 10 El Viso Recoletos 8 Prosperidad Conde de Aranda 4 JUSTICIA JERÓNIMOS Serrano Anguita 9 Universidad Barquillo 11 Ibiza Montalbán 11 Justicia Estrella Víctor Hugo 4 Jerónimos Niño Palacio Jesús Sol Alfonso XII 64 Cortes Pacífico Embajadores New-build developments Adelfas Source: Knight Frank CHAMBERÍ JUSTICIA EL VISO SALAMANCA JERÓNIMOS AVAILABLE STOCK: AVAILABLE STOCK: AVAILABLE STOCK: AVAILABLE STOCK: NEW-BUILD: 11.9% | EXISTING HOUSING: 88.1% AVAILABLE STOCK: NEW-BUILD: 11.3% NEW-BUILD: 30.0% NEW-BUILD: 2.2% NEW-BUILD: 32.6% EXISTING HOUSING: 88.7% EXISTING HOUSING: 70.0% EXISTING HOUSING: 97.8% RECOLETOS CASTELLANA EXISTING HOUSING: 67.4% Area (Ha): 93.79 Area (Ha): 73.94 Area (Ha): 170.92 Area (Ha): 87.31 Area (Ha): 77.34 Area (Ha): 190.64 Population (1-1-2016): 19,701 Population (1-1-2016): 16,420 Population (1-1-2016): 17,018 Population (1-1-2016): 15,484 Population (1-1-2016): 16,842 Population (1-1-2016): 7,031 Density (people/Ha): 210 Density (people/Ha): 222 Density (people/Ha): 100 Density (people/Ha): 177 Density (people/Ha): 218 Density (people/Ha): 37 % from overseas: 12.2 % from overseas: 18.5 % from overseas: 11.1 % from overseas: 13.7 % from overseas: 14.6 % from overseas: 9.3 Number of households: 7,942 Number of households: 8,326 Number of households: 6,005 Number of households: 6,533 Number of households: 6,820 Number of households: 2,776 Units fronting onto the street: 1,046 Units fronting onto the street:1,712 Units fronting onto the street: 845 Units fronting onto the street: 1,382 Units fronting onto the street: 959 Units fronting onto the street: 304 4 5 PRIME RESIDENTIAL MADRID, AUTUMN 2017 RESEARCH PRIME SUPPLY “The high percentage of prestigious period buildings Almost More than Salamanca Salamanca is in Jerónimos and Más del accounts for almost the area with the The fact that prime residential properties offer 90% 70% most new-build GRAPH 8 between 200 and 600 sqm of living space, Justicia is spurring the is existing housing are 4, 5 and 6 projects Available stock by property type allows for a higher number of bedrooms per “ El Viso, with a number of new full- bed homes 50% (Existing and new-build housing) of total home. wealth of single- scale refurbishment supply In fact, 4-bed properties have now replaced family properties, 5-6 BEDS projects” 3-bed homes as the most common residential 18% accounts for 25% 4 BEDS property type. 41.8% of total available 3 BEDS The number of bedrooms differs for new- 40.4% 1 - 2 BEDS supply” GRAPH 5 The super prime districts of Salamanca, for almost a third of the total supply in build and existing housing. Whereas 5 and 6 31.9% Existing housing stock available at Recoletos and Castellana account for Jerónimos and 30% in Justicia. bed-homes account for over 40% of the total 16.9% JOSÉ FARÍA Q2 2017 (%) almost 50% of total prime supply, owing This growing amount of new-build existing housing supply, they account for just Head of Prime Residential both to their size and their demographic. 16.4% housing can be attributed to the 18% of new-build home supply. However, 24.7% El Viso accounts for the second-largest 9.9% demand for refurbishment projects 4-bed prime residential properties are more 7% share and features a wealth of single- EXISTING HOUSING NEW-BUILD in these areas, as well as the lack of commonly found in new-build developments family properties, which represent a than in existing supply. 1 and 2 bed properties available existing housing. Source: Knight Frank Research quarter of the neighbourhood’s total account for almost 25% of total prime new- 27% In fact, whilst together both areas 46% available stock. Chamberí accounting for build supply, a similar percentage to the account for just 11% of total available 15% and Justicia, 8% follow in third and combined total for 1, 2 and 3 bed properties GRAPH 9 existing housing, they account for 36% Available supply by number of bedrooms fourth place.