The luxury housing markets in Spain that have risen and fallen the most in the aftermath of the pandemic

It's coming close to two years now since the coronavirus pandemic interrupted a lot of our day to day life and put a brake on much of the world economy. As we adjusted to the new normal, the real-estate market soon proved one of the most resilient sectors of the economy with an impressive recovery in the Spanish housing market after the sudden drop in transactions in 2020. This includes the luxury sector of the housing market in Spain as well, which has also experienced a solid recovery in transactions. And in spite of the pandemic, prices have been maintained or even grown in the neighbourhoods and districts of the main capitals and the coastal areas most associated with luxury housing.

With data from the idealista price report in November, in which the average price of housing in Spain increased by 3.7% year-on-year, we analyse the asking prices for luxury homes in the housing markets that have exceeded average prices of 4,000 euros/m2. We also compare these asking prices with the same from 2019 to analyse their evolution in the pandemic's wake.

With the prices mentioned, we are left with more than 160 luxury housing markets in Spain, divided between districts and neighbourhoods in the different provincial capitals and areas in coastal municipalities. Of these, the majority are located in the coastal municipalities, many known for their homes of more than one million euros

Where luxury housing has risen the most

The luxury housing markets in Spain that show the greatest increases in prices are largely shared between the Balearic Islands and Malaga. Among these markets, the growth experienced over the last two years in Palma's Genova neighbourhood takes the cake, with a 41.1% increase in prices, reaching 5,881 euros/m2. Two years ago, it had already surpassed the 4,000 euros/m2 mark, a notable dividing line in luxury real estate. Among the 10 areas with the highest increases in luxury housing prices in the pre-pandemic- post-pandemic comparison, half have seen the price that owners are asking for their homes rise above this reference value.

In the Montemayor-Marbella Club area in the Malaga town of Benahavís, neighbouring Marbella, prices have risen by 39.2% to 4,312 euros/m2. Comparing to its neighbour La Zagaleta-El Madroñal, home to one of Europe's most famous luxury condominiums, where the rise was only 3.7%, we can see the impressiveness of this jump. Completing the top three areas with the highest price increases we have Cala Vinyes in Calvià where prices have risen by 37.7% to 4,957 euros/m2.

And while the world famous Marbella might not have any neighbourhoods in the top three, it is the city that has the most neighbourhoods to experience large rises in property prices. Its neighbourhoods of Las Brisas (30.1%), Los Monteros (30%) and Los Naranjos (24.7%) are all among the top 10 housing markets with post-pandemic increases.

Alongside them, three Balearic areas are added to the list; Es Camp de Mar (29.8%) in the municipality of Andratx; the Ibizan village of Sant Josep (27.2%) in Sant Josep de sa Talaia; and the Paseo Marítimo neighbourhood of the Balearic capital, with an increase of 29.3%.

The Barri Vell district in Girona (29.9%) completes the top 10 luxury housing markets with the largest increases.

The areas of high standing in which prices have fallen the most

On the other hand, there have also been falls in prices in some luxury housing markets across Spain, such as Naut Aran, in Lleida, where owners' asking prices for their homes have fallen by 13.7% and remain below the 4,000 euros/m2 mark. Two Barcelona neighbourhoods, La Nova Esquerra de l'Eixample (-12.7%) and Diagonal Mar i el Front Marítim del Poblenou (-12.5%) have also fallen compared to the prices seen in 2019, but the latter remains the most expensive neighbourhood in Barcelona (6,202 euros/m2).

It is worth noting that two of the five most expensive areas in Spain have seen prices fall by double digits. The area of Es Cubells in the municipality of Sant Josep de sa Talaia in Ibiza is the most expensive in Spain with its 8,641 euros/m2, and remains so despite prices having dropped by 12.4% compared to 2019. Another prominent area is the Miraconcha district of San Sebastián has dropped 10.6% compared to two years ago to 7,243 euros/m2.

Some of Madrid's most expensive districts have also registered decreases in their prices, accompanying the aforementioned falls in Barcelona, a reflection of the general data for the entire housing market in both capitals. Some well-known neighbourhoods in the capital such as Sol (-11.1%), Gaztambide (-7.8%) or Trafalgar (-7.3%) have registered the most notable decreases, while Sarrià (-10%) and La Sagrada Família (-6.7%) accompany the aforementioned neighbourhoods in the data for Barcelona's falling house prices.

 The most expensive luxury neighbourhoods in Spain

After looking at the increase or decrease in the prices of luxury housing, we can also analyse where the highest prices of housing in Spain are to be found. As we mentioned, the area of Es Cubells, in Ibiza, continues to be the most expensive in Spain despite its decrease with its 8,641 euros/m2 in October 2021. Two years ago it registered 9,864 euros/m2.

Behind it, the Recoletos neighbourhood in Madrid, which reaches 8,500 euros/m2 after an increase of 1.5% compared to two years ago, is the only other area that remains above the real estate 'eight-thousanders', from which the Miraconcha neighbourhood in San Sebastian, with its 7,243 euros/m2 mentioned above, has fallen. In 2019, it reached 8,098 euros/m2.

The island of Formentera, which brings together its entire real estate market due to its small size, has a unit price of 7,930 euros/m2 after rising by 6.8%, which puts it into thrid place on the list, and leaves it verging on the select group of 'eight-thousands'. Behind Formentera and Miraconcha is the Jerónimos neighbourhood in Madrid, with its 7,148 euros/m2, and Port d'Andratx, again in the Balearic Islands, with 7,115 euros/m2.

Two other city neighbourhoods: the Área Romántica of San Sebastian (6,930 euros/m2) and Castellana in Madrid (6,909 euros/m2), together with two areas of the Balearic archipelago, Santa Gertrudis (6,764 euros/m2), in the Ibizan municipality of Santa Eulalia del Río; and the area of Costa d'En Blanes (6,619 euros/m2), in Calvià (Mallorca) complete the ranking of the top 10 areas in Spain for the luxury market.