Foreign millionaires are rejecting Galicia to buy luxury houses

Galicia is the community in Spain that concentrates the most wealth if you pay attention to the number of surnames that accumulate the most wealth. The fact that it is the residence of the founder of Inditex, the richest man in the country, and his daughter Sandra Ortega, puts the territory in an advantage compared to other autonomies. However, it is far from the area with the largest number of rich people in the country. In fact, it occupies the seventh position in this ranking with just over 8,200 people with a net worth of more than 700,000 euros (close to 4% of the Spanish total), but it is second on the pedestal if analyzed according to the average wealth of more than six million euros reported .

Usually on great luck related luxury goods such as vehicles, ships, aircraft, jewelry or furs. But above all, real estate inheritance. And this is where Galicia it moves away significantly from the rest of Spain. It has the largest wealth in the country on its territory, but with luxury housing stock which could be described as testimony. There are currently barely more than 400 properties valued at more than €1 million available on the marketing circuit for sale, according to the Galician Federation of Real Estate Companies (Fegein) in its latest report.

Among the reasons justifying such a limited catalog is the “lack of foreign clients” who show interest in investing in housing in Galicia, despite the fact that Spain is the second destination in the world with the most international capital in this luxury residential area. Fegein illustrates this with figures. At the end of 2022, a large volume of business in this segment was recorded throughout Spain 16,000 million euros, 39% more in a year-on-year comparison. AND Marbella it tops the list with wealthy foreigners willing to dig out their checkbooks for real estate on the Mediterranean coast. Its high-end real estate portfolio includes up to 4,500 homes for sale. Of course, the city of Malaga reaffirmed its position as a European luxury destination last year, and according to the ranking prepared by the European best travel destination portal, it was surpassed only by Ljubljana, the capital of Slovenia.

But if Galicia is compared in the same line of Atlantic tourism with Port, the differences are equally telling. The city of Duero has a good portfolio of houses worth more than a million euros ready to seduce a new buyer. More than 2,800 assessed properties above that amount, which means an offer up to seven times higher than the Galician one, says Fegein. The number of operations performed in the neighboring country recorded a strong growth, one of the highest in the EU, with an increase of 67%.

However, the Galician community is still left out of this amount of investment. Even in these times of high inflation, where luxury real estate is considered a very attractive alternative to cash. Nor does it benefit buyers who are looking for a “short term property” in this type of transaction. Nor from the favor of those others who acquire high-value property as their first residence. These two types of owners are usually Portuguese, British, French and South American.

Thinking about this premium segment means opening up properties with large rooms that add up to square meters: large bedrooms with spacious wardrobes, well-equipped kitchens with outdoor or even indoor pools, garden, gym, wine cellar, good view, good location, as well as excellent state of preservation. “These are some of the characteristics sought by a client ready to invest more than a million euros in a home,” explains the president of the Galician Federation of Real Estate Companies, Benito Iglesias.

in four provinces

From 403 objects are available For high-income buyers, it is Pontevedra that has more than half the supply, 240 homes, with Vigo and the O Salnés area accounting for 80%

these millionaire properties; A Coruña follows, with 125. Its catchment area and the Santiago area account for 84% of this park, although the Oleiros area (the Galician council with the highest average income and among the 25 richest in Spain) concentrates a good portion of these luxury homes. La Mariña Lugo and Monforte have 90% of the 24 properties valued at more than one million euros in the province of Lugo; while the 14 properties of this type registered by Fegein in Ourense are located in Barbadás and Carballiño.

The “stock” of holiday homes in coastal community areas has been reduced by 74% in ten years

For various reasons, Galicia lacks the supply of luxury homes, as well as holiday homes. Especially in coastal areas. In a decade, almost 11,000 properties disappeared from marketing channels of this species, which according to the data handled by Fegein, is growing again. The availability in this type of real estate has decreased by 74%, as of the 15,000 properties registered in May 2012, the market offers 4,100 properties as of this March.

According to the Galician federation, this housing bag is not that it has changed hands, but that “the owners have sold them (about 6900), rented them as holiday homes (3500) or withdrawn from the market (500) “, says Benito Iglesias.

The Galician association also reveals the strong demand registered by this residential business niche, because detached houses on the coast —as a second home— do not fall below half a million euros on average, twice as much as an apartment or flat in those same coastal areas. A Coruña with 1750 properties is the province with the largest offer, followed by Pontevedra with 1575 and Lugo with 775 properties (on the Cantabrian coast).