What is the answer to this question? Today, investing in luxury real estate is a good capital diversification practice. It is not even about the location of such real estate, but about how unique the project is designed by the developer.
Since January 1, 2023 in the province of Andalusia, which includes it, the luxury tax is canceled. This makes investing in expensive real estate particularly attractive.
The real estate market in Spain, compared to Germany, for example, is not so stable. He is subject to greater volatility. But this volatility applies to the new middle class market. The luxury housing market, especially in the coastal zone is quite stable. Elite real estate has always been a special market segment.
However, we will consider not even the elite real estate investments in the article, but the hyper elite real estate, the so-called collector's class. This class of real estate has its own laws. Such real estate never falls in price, even in times of deep crises. There are very few of them; the creation of projects on such a level requires great talent and an enormous amount of time for elaboration. However, we are not talking about individual construction, when clients order villas for themselves. Here we will be dealing with individual taste, and the architect has to adjust to the client's requirements.
We are talking about real estate of a different class, real estate whose sales price is outside the standards of the market. We are talking about real estate, for which you can ask a very high price. To create such real estate requires special investment projects. It is such projects and deals Investment Club in Spain.
Luxury real estate prices by about 2-3% per year, reaching a peak of 7%.
No rapid increase in prices here. And this gives very good figures for investors. Investing in luxury real estate is a reliable way to save money.
Luxury Property Developer & Advisor In Marbella
Despite the fact that the Internet is full of advertisements for numerous development projects on Costa del Sol, a closer look reveals that the choice is not that great.
On the one hand, an expensive coast with a great climate and developed infrastructure, a world tourism resort.
On the other hand, why do we not see really unique projects, which the world would talk about. Huge capitals are concentrated here, and the market could consume goods of a fundamentally different level.
Everything is there for that. So why isn't it there? We see, in principle, all the same things. Advertised villas, as a selection with the same and rather impersonal architecture. The concept of luxury is so displaced that virtually all properties over a million euros are automatically attributed to this class.
Typical slogans at every step. LUXURY VILLAS. EXCUSIVE PROPERTY.
This is roughly what we can find in the market.
Yes, there are a lot of developers on the market, a lot of offers to buy or build a luxury villa. Then an interesting question arises. Where is this unique real estate and is there uniqueness in what this market offers? As trite as the answer sounds, there is. Stereotypes.
Stereotypes shape the market. They force architects to build what is fashionable today: modern minimalist architecture with its style "The Boxes": concrete, glass and maximum accessible views from windows, minimalist interiors and ascetic atmosphere. This stereotype is imposed on the world. It is trendy, it is good and beautiful.
What does this have to do with?
Firstly because of the enormous competition on the real estate market. With such competition, you need to build quickly and cheaply, to impose trends and lifestyle on the consumer and sell quickly. The number of real estate agents is off the charts. Everything else requires talent, more time, more expense, and the need to fight in the marketplace to promote new ideas outside the box. Few people want to mess with that.
When does a different approach make sense?
If we are talking about special properties, the ones that cannot get lost in the market among general uniformity, then of course the approach must be completely different. Investments into luxury properties may bring quite different profit, only if such real estate has a characteristic feature and is a unique object at the market, which has no analogue. Then the sales price and demand for it can be radically different.
But then is it necessary to build such real estate? Yes, absolutely right! And in order to do that one needs a special developer who is able to shape such a project, involve the necessary experts and see the project through.
In Marbella, such a developer stands apart on the market and occupies a special niche of the so-called collectible real estate, which is a one-off on the market, has its own unique face, its own concept and level, incomparable with what is being built.
We break the market steriotypes
Of course, creativity comes first. You have to come up with something special. You have to have a lot of years of work and experience under your belt.
Next, you need to get the cost of the project so that compared to the selling price it looks insignificant. And then, the rate of return becomes so interesting to the investor that such projects may become a separate niche business.
How is this achieved? Read in detail in the article:
In this article, we talk in detail about all the secrets of creating a collectible class of real estate, which can bring an investor a profit margin higher than any other real estate project.