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World Observer

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Spanish Prime Residential Market Is Growing At The Fastest Rate

BySam Brad

Aug 23, 2021

The global residential market has maintained its strength in the first half of 2021. This is confirmed by the Prime Residential World Cities Index prepared by Savills Aguirre Newman, which also indicates that the impact values ​​have grown an average of 3.9%, which which is the fastest growth since December 2016 .

Low interest rates, the recovery of buyer confidence, the increase in transactions in the upper price range and the economic stimulus measures have contributed to the strong increase in property prices.

This growth has been preceded by a more moderate period, as values ​​between June 2018 and December 2020 only grew by an average of 0.7% as a result of global uncertainty and fiscal and political changes in many cities, according to the report that analyzes 30 cities .

However, not all locations performed the same in the first half of 2021. More than 70% of locations experienced positive growth , while the rest are highly dependent on international buyers and have been hurt by restrictions to travel.

The biggest price increase has been in Chinese cities, despite attempts to cool the market through tightening funding and changes in local policies. Financed purchases have driven property price growth in China in recent years, with buyers’ confidence in real estate as the safest investment.

In the United States, Los Angeles and Miami have registered increases of over 9% . Miami has benefited from migration to the city as a result of increased telecommuting, favorable local taxes, an influx of technology and financial companies, and increased purchasing power due to low interest rates.

In markets where prices have fallen, such as Paris and Mumbai, the lower volume of transactions over the past year has been relevant. These cities suffered prolonged lockdowns that slowed sales and undermined buyer confidence. In New York, prices have declined for the past four years due to oversupply , but signs are that they will stabilize this year as transactions increase.

In some cities, price changes have gone from negative to positive in the first half of 2021. Singapore, Bangkok and Kuala Lumpur benefited from increased demand and decreased supply. The rise of telecommuting and the resulting need for space helped raise impact values ​​in Dubai, Cape Town, Moscow and Lisbon.

Prime residential for rent
Following the 1.8% drop in prime rental prices in the last half of 2020 due to global travel restrictions, lower demand for employee relocations and the entry of tourist apartments into the long-term market in many cities, rents have increased by 0.5% in the first half of 2021.

According to the Savills Prime World Cities report, 39% of cities have experienced an increase in rents in the first six months of 2021, compared to 25% during the same period in 2020. Not all cities have behaved the same: locations Less affected by landfills and suburban locations have seen stronger rent increases.

The average profitability in the 30 cities in the index was 2.9% from January to June 2021 , while in the same period of 2020 it stood at 3.1%. This is the tightest return since Savills began recording this data in 2005.

Sam Brad

The Great Writer and The Passionate Poet As Well, He Graduated from University Of Florida in Journalism and Brad have around 12 years of experience in news and media section.

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