The law of supply and demand is relentless. When the number of luxury properties available in the most exclusive areas of Spain (in the center of Madrid, Marbella, Ibiza…) decreases, but the number of people wanting to buy them remains the same or even increases, the logical result is that prices are skyrocketing, while at the same time industry players are being forced to look for new ways to differentiate and stand out in order to get their small but juicy piece of the pie. After all, they specialize in the exclusivity business. “It was the first time I sold a house without the buyer visiting it in person. Of course, this is not common practice and it is true that we have provided all the audiovisual documentation and have committed in writing to return the signal if information does not correspond to reality. But it is the first time,” says Gonzalo López-van Dam, director of the Promora agency, about a single-family home in La Moraleja that a Mexican businessman bought for eight million euros, one of the most expensive exclusive urbanizations in Spain, north of Madrid.
Something similar happens in Ibiza or on the Costa del Sol. In general, the dozen experts interviewed for this report agree that things are simmering in a sector that knows no crisis and no interest rate increases. According to Hiscox’s The Luxury Housing Market in Spain 2023 report, Spain is the fourth most attractive destination in the world “for investment in luxury real estate for the super-rich”, behind only the United States, the United Kingdom and Australia. a multinational corporation that specializes in insuring expensive houses of this type. With Madrid, Barcelona, Andalusia and the Balearic Islands as big stars, the report estimates that around 8,000 houses worth more than three million euros were sold last year, 55% more than a year earlier and more than double a lot like 2019.
A lot has happened since then, starting with a pandemic that, among other diverse consequences, forced everyone to look more closely at their homes than ever before and triggered a kind of real estate carpe diem for those who can afford it. Without taking into account that real estate is a safe haven in unstable times of war and inflation – in Europe, the mega-rich invest two-thirds of their wealth in real estate – and that Spain remains significantly cheaper than its competitors. In this sector. “I recently showed a house in Mallorca and asked the viewer, an American, how much he thought it was worth. In California, he told me, it would be about $55 million. Well, it was sold for 12 million euros. The same applies to the IBI, which would be about 350,000 dollars per year and here 5,000 euros,” says Bruno Rabassa, CEO of Berkshire Hathaway HomeServices Spain, the real estate company of tycoon Warren Buffett.
Javier Medina opened the John Taylor office in Ibiza two and a half years ago. Ximena and Sergio
In this breeding ground thrives a sector built on the basis of personal and professional relationships, with networks of interconnected services ranging from the person who moves the bricks to the person who opens the refrigerator in a villa . on holiday in Ibiza to see if there was any juice left because the owner was arriving the next day. “We are talking about a type of customer to whom you cannot say no to anything, you cannot tell them that you do not have a lawyer, you cannot tell them that you do not have a builder, a decorator…” explains Javier Medina, manager of the John Taylor agency office in Ibiza.
On the island of super-luxury villas (one of which is currently for sale for 45 million euros on a 110,000 square meter plot on a peninsula on the edge of the sea) “there are a number of very subjective values. at the edge of the sea, on a cliff, in a forest…) making pricing difficult; And that, coupled with the high international demand, means that sometimes the price is simply what someone is willing to pay,” explains Medina.
The commission percentage for agents in this sector is similar to other segments – it ranges from 3% to 7% depending on the region – but apart from these players and the classic developers, at Superprime Real Estate I also work for many others. In Ibiza, for example, there are very characteristic profiles. For example, the local lawyer who has to guide the buyer through a turbulent world full of rules and regulations: “No two properties on the island are the same; Most of the villas are on rustic grounds and you have to look through the archives to check that everything is in order,” says María Doblas, director of Manzanares Abogados Ibiza. Or the villa manager, who is responsible for the maintenance of the houses, cleaning, gardening and all services. There are individuals (working in some villas requires exclusive dedication) and specialized companies, although these are usually associated with rental services.
“In Ibiza, most of the luxury buildings are on rustic land. That is why there are many peculiarities and that is why it requires a much more complex and detailed investigation that the lawyer must carry out,” says María Doblas, director of Manzanares. Lawyers on the island. He is diplomatically referring to a reality that others express much more bluntly: that it is difficult to find a villa in Ibiza that is not built illegally or does not have a permit. Ximena and Sergio
Rafael Botella is a kind of all-rounder for the Famosa developer in Ibiza: he solves problems, fixes defects, maintains the properties… In addition, he is the sole “villa manager” of three large villas, which he keeps in perfect condition: you is responsible for the cleaning service, gardening, supplies and even shopping and picks up the owner at the airport when he arrives on vacation: Ximena and Sergio
Because even those who buy such villas to stay tend to rent them out for the rest of the time, not to mention those who buy them as a pure investment, whether they are individuals or directly companies or funds. John Taylor offers these services and, for example, takes care of a villa that is rented out for 300,000 euros per week. “Of course, in this case it’s not just about the house: we offer a 24-hour driver, a cook, we provide you with a boat…” Medina lists.
In general, luxury services associated with houses are highly valued in this world, such as the concierge – a specialized personal assistant – who takes care of all needs – goes shopping, what you need – or leisure requests – an excursion or organize a party by making a reservation at the trendy restaurant. There are also companies that specialize in this and in many cases it is the villa manager who performs this function, but there are more and more luxury offerings that include this and all sorts of amenities. One of the most successful sales this year, a record in Barcelona, was a 40 million euro penthouse in a building on the corner of Passeig de Gràcia and Avenida Diagonal, which has all the services of the prestigious Mandarin Oriental hotel. Rabassa mentions the luxury apartment complex Epic by Fendi in Marbella from four million euros, an example of promotions with the seal of luxury brands, from fashion and decoration, as in this case the Italian company, to cars; The 40 villas in the Lamborghini-backed project in Dubai have already been sold, but delivery is not scheduled until 2026.
Medina points to a very similar project currently under construction on the western side of Ibiza: Sabina Estates, a residential complex of “five-star serviced” villas, for which the promoters have invited a handful of renowned architects and designers to take part . International, like John Pawson, David Chipperfield or Elias Rizo. Medina shows the work in the distance, literally from the terrace next to the pool, of a mansion for sale in Cala Tarida: 995 square meter house on a plot of just over 33,000 square meters.
The company that built it, Famosa, does not want to reveal the sales price, only admitting that it is more than 15 million. It is advertised with a price tag to be consulted, which is very common in an industry where a large part of sales take place outside the market, that is, they are not published anywhere because their owners prefer to be as discreet as possible various reasons: because they are famous, they do not like to disclose the size of their real estate business, perhaps because they do not want to raise doubts about the health of their accounts… In Menorca, for example, Viva Sotheby’s has 12% of the properties of this modality. Houses in its portfolio, says its general director Alejandra Vanoli. Depending on the region and time, some agencies may have a much higher off-market percentage, which is why Mar Herranz, sales manager of Engel & Völkers in Pozuelo and Aravaca, warns that this is the case when publishing lists of the most expensive houses might be leave out some of the meatier ones.
In times of tough competition, this is a great value for real estate companies. Also for independent agents, personal real estate advisors who have a large presence in some markets, such as Madrid. These are specialists to whom foreign customers delegate the entire apartment search. This is the case of Gloria Silva and Cecilia Varela, who, since founding their agency four years ago, have made a name for themselves thanks to word of mouth, offering a complete service ranging from initial documentation to full service, if desired . Rental of materials, purchase and placement of furniture and even dishes and linens. Under the name Silva & Varela (Gloria Silva and Cecilia Varela) they have specialized in a very specific target group: Latin Americans looking for an apartment of about 200 meters, between two and three million, on the Golden Mile in the center of Madrid, seasons to spend and rent the rest of the time.
Independent real estate agents Gloria Silva (right) and Cecilia Varela founded a personalized real estate advisory agency four years ago to find homes in central Madrid. Ximena and Sergio
In a world where public relations and contacts are fundamental, the transition for the actress Ana Vide was completely logical and smooth until, a little less than two months ago, she began taking over the management of “marketing” of the organizer Famosa Real State Ibiza take over. “Since I come from Ibiza and am friends with the owners, they signed me. I come from the world of acting and fashion and have an aesthetic vision that I think contributes to the project.” Ximena and Sergio
You have to look for the gap and the difference between so much competition. Promora, for example, knows this, although a few years ago it took part in a record sale in the center of the capital – a 750 square meter triplex with a terrace and pool for which a large Central European fortune paid 14.6 million euros is one of its greatest assets his years of experience in La Moraleja, which gives him enormous control over the area. In fact, the marketing of the property with a 5,400 square meter plot of land with a 1,300 square meter house, which we talked about at the beginning, came about through personal contacts. “In this case, I knew the seller since we were little. He called me and told me he wanted to sell,” explains López-van Dam, partner in the agency his mother founded in 1975.
Finding properties for sale is becoming a very important part of agencies’ work in this highly competitive environment of dwindling supply. But logically also that of the buyer. International cooperation networks – evident in multinational companies such as Engel & Völkers or John Taylor – and databases of potential customers are becoming invaluable tools – Viva Sotheby’s, for example, has those of the famous auction house with which it shares the matrix. But also digital media and social networks, where real estate agent accounts have proliferated, sometimes with great impact thanks to the general curiosity that luxury arouses. López-van Dam says that the client who bought the above-mentioned house in La Moraleja found out about it through the pictures posted on networks at the house’s presentation party.
However, it is more difficult for the customer to see an empty house in whatever format. For this reason, to improve the presence of this property, Promora has collaborated with La Moraleja Home, a company dedicated, among other things, to home staging, that is, a staging that consists of filling the houses for sale with all the details ( from the beds with their sheets and the armchairs in the living room to the book on the bedside table and the toilet paper in the bathroom) that give the visitor the feeling of living there without any effort. They do this with the furniture and accessories that the young company has purchased: “It is an investment because you cannot just put any piece of furniture in this type of house,” says Pedro González del Campo, co-founder of the company. “I think in two years no house of this size will be sold empty,” he predicts.
The future buyer could keep some or all of the furniture, although this is rare as they would prefer to design the house to their liking. What happens more than once is that they keep some of the artwork used at the gathering or hire the decorators who designed them. It happens that some of the works of art used in the assembly are kept – these companies, including agencies and organizers, have agreements with artists and gallery owners – or that they hire the decorator who designed them. Two things happened with the eight million house in La Moraleja: they kept a menina by the artist Felipao and the Disak studio (Cristina Remírez de Ganuza and Jérôme Le Fouillé), partners of La Moraleja Home, with the design of the interior commissions design. Another example of this back and forth that Javier Medina also mentions. “Often a customer comes to us who has rented on holiday, falls in love with Ibiza and ends up buying a villa which he uses for two or three weeks in the summer and which we rent to him for the rest of the time.”
But the real estate gold rush has its downsides. It is true, explains the economics professor at Pompeu Fabra University in Barcelona, that price increases in the super-luxury real estate market – with its own rules and mechanisms – have no impact on the rest of the sector. However, it does have an impact on the Conditioning of the entire offer because, given the housing shortage, “it does not seem most appropriate” to use large areas to create just a few large ones. Aside from that. These villas contribute to unsustainable use of resources, warns Juanjo Torres, spokesman for Friends of the Earth Ibiza. “People think that this is the goose that lays the golden eggs, but it turns out that there is a water shortage on this island and these villages can use 50,000 liters of water a day.” True, they insist on efficient use of resources and energy, but are so disproportionately large that they still spend too much,” he says.
Julio Iranzo, CEO of Avellanar, a company dedicated to the renovation and promotion of “unique houses” in Madrid, in one of them on Paseo de la Castellana. Ximena and Sergio
This means that the industry systematically incorporates the idea of efficient use of resources and energy into every sale. It is one of the features that all superprime players without exception mention among the definitions of luxury. Incidentally, they talk about the classics: the location – above all, of course – as well as home automation and geothermal energy and high-quality materials. As trends they also name large windows, straight and modern lines and unique architectural elements – a monumental staircase, a window completely hidden in the wall. From there, to taste, the colors which in this case can also take on all possible shades in the form of spas, discos, gyms, mini golf courses, glass garages, to see the car collection from the living room…
But there are also things that you don’t see, but that you may or may not hear, emphasizes the promoter Julio Iranzo, CEO of Avellanar, in a house that the company is renovating at one end of Madrid’s Chamberí district, already on Paseo de La has Castellana: “A very important aspect of the luxury of this century is the absence of noise.” He says that the first thing they did was throw away everything to build a large soundproof box that insulates the apartment – 624 square meters, 7.5 million – and that in every door, in every closet, the obsession was to eliminate the noise, whether through those rubber bands on fences or doors that close with magnets rather than latches and sliders (the metal tongue that fits into the fence ).
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