This is one of the conclusions of the ‘Informe de Mercado Madrid 2017’, undertaken by the German firm Engel & Völkers, who foresee a consolidation of new works throughout this financial year after the upturn in 2016. This tendency will be led by the big developers in the periphery zones and in the refurbishment of the centre of the capital.
The study, presented by Paloma Pérez Bravo, general director of the Metropolitan Market Center (MMC) of Engel & Völkers in Madrid, points out that, in terms of process, the scarcity of supply in certain zones will cause “increases of about 4% in the sales sector and 7% in the rental sector”.
If in 2015 the premium districts were the leaders, the highest price rises in 2016 took place in other, more popular zones “A very positive sign of sustainable recovery”, in the opinion of Pérez Bravo, who adds that “Universidad, Delicias, Lista and Ciudad Jardín are the districts where double digit increases have been recorded”.
2016 was the year of the construction of new real estate projects in the large Spanish cities. Requests for permission to build houses have increased for three consecutive years and just in Madrid an increase of 38.77% has been noted in the first ten months of the year. This increase, together with the 44% of areas destined for building, have brought a supply of 15,391 new homes, of which 14,111 will be new build and 1,289 a result of building renovation.
In spite of the renovation of property growing by a double-digit figure, actual supply still does not satisfy the existing demand for housing in the prime zone, putting upward pressure on the cost of a property to refurbish.
The US, UK and German investment funds are, together with the great Latin American fortunes, the most active investors in these types of development which, throughout recent months, have formed various long term joint ventures with local developers.