We invite you to discover an article covering the upcoming openings of Coldwell Banker® franchises in Madrid, along with an analysis of the real estate market and trends among American clients.
Coldwell Banker® is a luxury property agency that has shifted its focus to Madrid as part of its expansion strategy. While our company counts prominent personalities such as Jennifer Lopez and Ben Affleck among its clients, we have been operating in Spain since 2015. It was at this time that we decided to concentrate on expanding our presence in the Spanish capital. Currently, the company is collaborating with Jennifer Lopez and Ben Affleck in the sale of their stunning residence in Beverly Hills, valued at 85 million dollars.
At Coldwell Banker®, we operate under a franchise system, and we plan to open up to three establishments in Madrid by 2024. "Our goal in 2023 has been Madrid," as acknowledged by the General Manager of Coldwell Banker España, Silke Dittrich, in conversation with THE OBJECTIVE. In this regard, the first office of this real estate agency will open in the Barrio de Salamanca next January.
The second opening is scheduled for the coming summer, while the third branch is expected by the end of next year. Although these first two offices will allow Coldwell to work throughout the city, focusing on prominent luxury sectors such as the Barrio de Salamanca, Chamartín, Chamberí, and the city center, our company's expansion will not stop there.
In addition to covering the city center, Coldwell Banker España plans to open new branches in high-end areas on the outskirts of Madrid, such as the municipalities of Pozuelo de Alarcón, La Moraleja, Conde Orgaz, and Fuencarral. These initiatives are part of Coldwell Banker's ambitious expansion plan in the luxury real estate market in the Spanish capital.
Rise of Americans
Our company, Coldwell Banker España, has decided to significantly expand in Madrid, capitalizing on the growing interest of American citizens in the city. This increase is reflected in record numbers of American tourists visiting the city, making the United States the main source of tourists in the region. Additionally, in the real estate sector, American citizens have been actively involved in property transactions, reaching unprecedented levels in 2023.
The attractive combination of housing prices and the strength of the dollar against the euro has positioned Spain as an appealing destination for Americans. In this context, we observe a robust market, receiving inquiries from places like New York, Boston, and Chicago.
"We believe it is a very potent market, not only for Latin American clients but also for North American clients. We have requests from places like New York, Boston, or Chicago," acknowledges Dittrich. "The North American has set their sights on Madrid," she adds. In her opinion, this growing interest, which has increased after the pandemic, has several causes. On one hand, the strength of the dollar against the euro makes entry into the Spanish real estate sector more accessible, with prices more competitive than in the U.S.
But also, the issue of the golden visa underlies the matter. "Buying an apartment in Spain above half a million euros guarantees them a golden visa and access to Social Security. It also facilitates traveling within Europe and sending children to study on the Old Continent," she adds.
Most foreign clients who purchase property above half a million euros do so mostly in cash. However, there is a variety. "There are clients who, when they come here and see that the interest rate is half of what they pay in the U.S., are interested and request a mortgage," assures our General Manager.
In Spain, with the increase in interest rates and the rise in the purchase of property by foreigners, the percentage of homes acquired in cash has skyrocketed. Specifically, the percentage of home purchases financed by a mortgage loan stood at 43.5%, according to the latest data provided by notaries. This means that 56.5% was done in cash.
Aside from luxury markets like Madrid, Barcelona, Ibiza, Mallorca, and Marbella - where continuous growth is expected - we anticipate that the year 2024 will be a transitional year in the sector, initiating a new cycle for the Spanish real estate market. "After a period of sustained growth, the sector is facing a transitional moment, where the volume of operations will slow down, and we will see declines in house prices," considers François Carriere, the CEO of Coldwell Banker España.
From Coldwell Banker , we project that price declines will persist in 2024, accompanied by a decrease in transactions. "The sensitivity of prices to changes in interest rates is evident, and with the forecast of a decrease in rates in mid-2024, we anticipate a slight inflection in prices," they add.