Once Under the Radar, Americans Are Buying Homes in Spain More Than Ever Before | Kanebridge News
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Once Under the Radar, Americans Are Buying Homes in Spain More Than Ever Before

The strength of the dollar, an increase in direct flights and an appetite for the ‘Spanish way of life’ has driven more U.S. buyers to the country’s real-estate market

By J.S. MARCUS
Thu, Feb 9, 2023 9:23amGrey Clock 6 min

Ron Hale ushered in 2023 by relocating from landlocked Orlando, Fla., to a primary residence in Marbella, on southern Spain’s Mediterranean coast. In January, the 59-year-old founder and CEO of Natural Tone Organic Skincare, a Florida-based beauty-supply company, closed on a 3,000-square-foot, three-story townhouse, with four bedrooms, spacious balconies, sea views and a sale price of $1.1 million.

Mr. Hale, who wanted a base to better supervise his company’s diverse European interests, chose Marbella, a glamorous resort known for its balmy year-round climate, because of “the food, the golf and the international flair of it all,” he says. And his newly remodeled turnkey purchase—what he likes to call a place to lock and leave—has easy access to Málaga airport, the gateway to Spain’s Costa del Sol region, a 45-minute drive away.

“Golfing interests me,” he says, citing his townhouse’s proximity to a number of courses, such as the Real Club de Golf Las Brisas. “But the airport is key.”

Florida native Ron Hale, beauty-supply entrepreneur, just relocated to Marbella from Orlando.
PHOTO: GABRIEL NAVAS FOR THE WALL STREET JOURNAL

American buyers of primary residences and vacation homes are shaking up the Spanish real-estate market. Mark Stücklin, a Barcelona-based real-estate analyst who owns the website Spanish Property Insight, says Spanish notary records indicate that sales to Americans were up 76% in the first half of 2022 compared with the year before, making it the highest half-year by volume on record.

Mr. Stücklin says the plurality of Americans are buying in Andalusia, the region that includes Marbella, Málaga and Seville. Sean Woolley, managing director of Cloud Nine Spain, which handles sales of coastal properties between Málaga and Gibraltar, says Americans “were never really on our radar before” but they now make up 25% of his sales and 20% of his inquiries. In Madrid, Alejandra Vanoli, managing director of Spain’s VIVA Sotheby’s International Realty, says Americans have become her agency’s No. 1 foreign clientele in the Spanish capital’s high-end market, replacing Latin Americans, the longtime linchpin in luxury sales.

Regular direct flights between Atlanta and Madrid were a key factor for Gil and Laura Madrid, who work together at Ms. Madrid’s Georgia-based travel agency, Resort to Laura Madrid. This year, the couple’s surname proved “fortuitous,” jokes Mr. Madrid, 58, when they paid just over $1 million for a 1,790-square-foot Madrid apartment in the city’s atmospheric La Latina neighbourhood, a short walk from the Royal Palace. They settled on the two-bedroom, two-bathroom turnkey refurbishment after looking at a dozen other homes. They plan to use it for vacations.

Ms. Madrid, 54, calls the choice a no-brainer, citing the city’s vibrant culture and the historic centre’s walkability and affordability. The couple say they had been reluctant to buy a second home but were inspired by the strength of the dollar—down nearly 10% since breaking through parity with the euro last summer but still near historic highs in terms of purchasing power—and by the eight-hour travel time between their Atlanta and La Latina homes.

“Nonstop flights are really critical,” adds Mr. Madrid.

Spain’s real-estate market is seeing rising prices, but the country, which by some measures is still recovering from the 2008-09 financial crisis, can seem like a bargain. The Madrids’ new La Latina neighbourhood is located in the Centro district, among the city’s strongest, with prices rising 8% between the fourth quarters of 2021 and 2022, according to analysis by Tinsa Spain, the real estate valuation and data company. Greater Madrid prices are down 12.3% from early 2008 highs. In Marbella, Mr. Hale’s new home, prices rose 6.4% in 2022 from 2021, still down some 15% from their peak in the third quarter of 2008.

Palma de Mallorca, the capital of Spain’s Balearic Islands, has some of the country’s most expensive residential real estate, with average prices of $263 a square foot, up nearly 6% in 2022. Now, with seasonal direct flights to Newark, N.J., the historic city, with its revived medieval core, is seeing a spike in American buyers who want to balance Old World charm with contemporary convenience. Sotheby’s Ms. Vanoli says Palma city properties, 20 minutes from the airport, are at the top of Americans’ lists.

Kelsey and Michael Wulff, a British-German couple in their 60s, have listed their 11,800-square-foot Palma palace for $6.3 million. The couple, both retired, paid $3.1 million in 2013, and then spent about $530,000 to renovate the 13th-century structure. After a few years of dividing their time between the palace and a smaller city apartment nearby, they are selling the larger home, which in recent years they have used for guests, parties, and events, such as a private concert series.

Located a short walk from Palma’s waterfront Gothic cathedral, the palace salon has its original wooden ceilings, whose vivid colours were revealed during a restoration, and a rooftop terrace with 360-degree views. Mrs. Wulff has been a witness to Palma’s remarkable gentrification. Back in 2000, she recalls, “even taxi drivers wouldn’t come to this area. Now it’s Palma’s most expensive.”

Kelsey Wulff, a retired British television producer, and her husband, Michael Wulff, have listed their 11,800-square-foot Palma palace for $6.3 million.
PHOTO: STUART PEARCE FOR THE WALL STREET JOURNAL

Back on the mainland, Valencia, Spain’s third-largest city, also has become a centre of expatriate American living, even though it doesn’t have direct flights to the U.S. Real-estate agent Conor Wilde, CEO and founder of Found Valencia Property, says 90% of his American clients are interested in full relocation. This new wave of expat American is coming for a “Spanish way of life” that his clients regard as a respite from political divisions and the threat of gun violence, he says.

Newly resettled Americans typically arrive with school-age children, he says, but maintain their home ties, spending summers and holidays back in the U.S. “We have American buyers coming in every single week,” he says. “I have never seen anything like it.”

Valencia combines Barcelona-style architecture and beach life with Madrid-style urbanity and Seville’s signature orange trees. Rob Glickman and his wife, Tina Ashamalla, a couple in their early 50s, relocated here in 2019 from the San Francisco Bay Area. Now living in a rooftop rental in the historic centre, Mr. Glickman, a former Silicon Valley marketing executive who works remotely for a London-based marketing startup, and his wife, a nonprofit board member, closed in late December on a 1,400-square-foot apartment near their rental.

They plan to use the property now for visiting friends and family, and possibly later on as a primary residence in their retirement. They paid $470,000 for the apartment and two garage spaces (precious commodities in the historic city) and are now shopping for a three- or four-bedroom apartment with outdoor space for themselves and their two children, ages 20 and 17, after the family moves out of the rental. “The original idea was to travel the world,” says Mr. Glickman. “Then Covid hit and we stayed here.”

Mr. Wilde says newly arriving Americans often come with Spain’s so-called Golden Visa program in mind. This rewards real-estate purchases of at least 500,000 euros (about $536,000) with familywide residency permits.

Scott Pirrie, a recent Valencia arrival from greater Seattle, is earning dollars from real-estate investments back in the U.S. Currently, Mr. Pirrie, 41, and his wife, 29, along with their young daughter, are living in a rental, but are looking for a three-bedroom apartment of up to 2,150 square feet at a price that would qualify them for the Golden Visa program.

More Americans also make up the clientele at Culto Interior Design, a Barcelona studio co-founded by Daniel Rotmensch, 41, a Spain-based Israeli who offers a one-stop-shop refurbishment service that includes art on the walls.

Mr. Rotmensch says Americans typically spend $160,000 to $320,000 on redoing their new homes, which may include German kitchens and Italian designer furniture, and nearly always lead to an upgrade in air conditioning. He says his recent American clients come from Miami, Los Angeles and San Francisco, among other places, and are interested in areas like Eixample, a 19th-century district marked by Art Nouveau architecture and a lively shopping and restaurant scene.

Average home prices in Barcelona top out at $358 a square foot, slightly higher than Madrid, but growth is more sluggish. Prices in the Eixample district rose a mere 1% in 2022, says Tinsa.

Eixample luxury homes, known for their stylish vintage detailing, are a fraction of what similar units might cost in London or Paris. A four-bedroom, 3,900-square-foot apartment in a prime Eixample neighborhood is currently listed for about $3 million. The apartment has stucco ceilings and a balcony off the terrazzo-floor kitchen.



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Philip Lowe’s comments come amid property industry concerns about pressures on mortgage holders and rising rents

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Leaders in Australia’s property industry are calling on the RBA to hit the pause button on further interest rate rises following yesterday’s announcement to raise the cash rate to 4.1 percent.

CEO of the REINSW, Tim McKibbin, said it was time to let the 12 interest rate rises since May last year take effect.

“The REINSW would like to see the RBA hit pause and allow the 12 rate rises to date work their way through the economy. Property prices have rebounded because of supply and demand. I think that will continue with the rate rise,” said Mr McKibbin.  

The Real Estate Institute of Australia  today released its Housing Affordability Report for the March 2023 quarter which showed that in NSW, the proportion of family income required to meet the average loan repayments has risen to 55 percent, up from 44.5 percent a year ago.

Chief economist at Ray White, Nerida Conisbee, said while this latest increase would probably not push Australia into a recession, it had major implications for the housing market and the needs of ordinary Australians.

“As more countries head into recession, at this point, it does look like the RBA’s “narrow path” will get us through while taming inflation,” she said. 

“In the meantime however, it is creating a headache for renters, buyers and new housing supply that is going to take many years to resolve. 

“And every interest rate rise is extending that pain.”

In a speech to guests at Morgan Stanley’s Australia Summit released today, Governor Philip Lowe addressed the RBA board’s ‘narrow path’ approach, navigating continued economic growth while pushing inflation from its current level of 6.8 percent down to a more acceptable level of 2 to 3 percent.

“It is still possible to navigate this path and our ambition is to do so,” Mr Lowe said. “But it is a narrow path and likely to be a bumpy one, with risks on both sides.”

However, he said the alternative is persistent high inflation, which would do the national economy more damage in the longer term.

“If inflation stays high for too long, it will become ingrained in people’s expectations and high inflation will then be self-perpetuating,” he said. “As the historical experiences shows, the inevitable result of this would be even higher interest rates and, at some point, a larger increase in unemployment to get rid of the ingrained inflation. 

“The Board’s priority is to do what it can to avoid this.”

While acknowledging that another rate rise would adversely affect many households, Mr Lowe said it was unavoidable if inflation was to be tamed.

“It is certainly true that if the Board had not lifted interest rates as it has done, some households would have avoided, for a short period, the financial pressures that come with higher mortgage rates,” he said. 

“But this short-term gain would have been at a much higher medium-term cost. If we had not tightened monetary policy, the cost of living would be higher for longer. This would hurt all Australians and the functioning of our economy and would ultimately require even higher interest rates to bring inflation back down. 

“So, as difficult as it is, the rise in interest rates is necessary to bring inflation back to target in a reasonable timeframe.”

MOST POPULAR

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

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