The allure of European cities for international property buyers

Madrid

The Spanish capital, with its handsome architecture and brilliant blue skies, has consistently flown below the radar, often overshadowed internationally by Spain’s rather more flamboyant second city of Barcelona. In recent years, that has changed, as buyers from around the world, and North and South America in particular, hone in on Madrid’s charms and value. International five-star hospitality names have also arrived in numbers, led by the Four Seasons and Mandarin Oriental.

Prime locations include neighbourhoods around beautiful Retiro Park, Recoletas in Salamanca and Jeronimos where two-bedroom apartments in period buildings start from around €2 million. The Wealth Report 2024 showed the value on offer, with US$1 million buying three times as much space in Madrid as it would in London and twice as much as in Paris.

“Nowhere in Europe is the prime market growing faster than in Madrid, growth that reflects a longer-term trend that has been taking shape since Q3 2021,” says Carlos Zamora, Head of Knight Frank Madrid, who predicts a 6.5 per increase in prime property prices in 2024. “Since that point, year-on-year growth has hovered between 2 and 6 per cent in every quarter.”

Barcelona

The laid-back lifestyle of a vibrant and artistic city by the sea combined with a thriving tech and entrepreneurial scene makes Barcelona an enticing option. The city ranks among the top three most popular start-up cities in Europe and welcomes those looking to relocate as well as anyone looking for a culture-heavy holiday home.

Barcelona scored well in the European Lifestyle Monitor for infrastructure and mobility, human capital and quality of life. Along with the sea and sand, the city has a fabulous culinary reputation. That includes being home to the currently best restaurant in the world according to ‘The World’s 50 Best Restaurants,’ who placed three Michelin-starred Disfrutar at the very top of their 2024 list. 

The city’s rental yields are reported to be among the best in Spain – although beware tight and rigorously applied restrictions on short-term and Airbnb type rentals for many properties. Prime property prices rose by 2.7% last year while sales to non-Spanish buyers in the first quarter of 2024 defied the fall in the wider Catalan market to rise by 17.5%.

Lisbon

Lisbon has enjoyed an extended period in the sun, seeing property prices soar as buyers discover the value and lifestyle of the Portuguese capital, yet it remains good value compared with many other European cities. Prime prices there range from €9,500 to €10,500 per square metre, substantially below London (from €26,500), Paris (from €21,400) and Berlin (from €12,100).

Wonderful weather, an affordable cost of living and good international connections make Lisbon’s quality of life a pleasing one, balancing an infrastructure and economy that in general lags behind the other cities in the index. As one of Europe’s fastest growing tech hubs, home to regional tech centres of firms including Google, Microsoft and Cisco, and with local start-ups escalating in value times three times in five years, the city becoming known as Europe’s answer to Silicon Valley looks set for a promising future.

Berlin

Stirring art and culture, a good value lifestyle, a thriving tech eco-structure and excellent local transport, are all reasons why the German capital shone in the Lifestyle Monitor for human capital and quality of life, coming out on top of the ten for infrastructure and mobility.

Pre-Covid Berlin registered dynamic population growth, welcoming 50,000 new arrivals every year, most of whom were well-educated and young and today, that group continues to see the opportunities in the city. And as the European Lifestyle Report shows, it’s not just the younger demographic who are eyeing up Berlin. In our survey of over 700 high-net-worth individuals from 11 different countries covering 28 nationalities, when asked to give their preferences for the 10 city destinations covered in the report, Berlin was a top two choice for four of the six high-net-worth age groups surveyed.

“Informed decisions yield the best outcomes, especially when guided by robust data,” concludes Ellen Soberman, Global Research Manager at Knight Frank who worked on the European Lifestyle Report. “These rankings in the Lifestyle Monitor underscore the diverse strengths of Europe’s leading cities, making them attractive options for discerning individuals seeking to relocate.”