A place in the sun: the enduring appeal of Spanish luxury real estate

In an increasingly turbulent world, Spain sits at an intersection of global mobility, resilient real assets, long-term capital preservation and security – a combination that continues to draw sophisticated international wealth to its luxury property market. Toni Garcia, Head of Wealth Management Lending, Spain, and Saydam Salaheddin, Global Head of Real Estate Lending at Deutsche Bank Private Bank, share their perspectives on why they believe this trend is set to endure, and how a global bank with local presence can help ultra-high-net-worth buyers realise their ambitions.

Spain’s appeal is often framed in lifestyle terms: dynamic cities, dramatic landscapes, a warm and sunny climate, rich cultural heritage and a globally recognised culinary scene, all set within a relaxed, foreigner-friendly environment. It is little surprise that the country ranks among the world’s most visited destinations, welcoming close to 100 million international tourists in 2025 – an all-time high.

Beyond tourism, however, the Spanish luxury real estate market has undergone a quiet transformation. A combination of economic momentum, cultural depth and strong quality-of-life fundamentals is drawing growing interest from ultra-high-net-worth (UHNW) individuals and families, with demand increasingly rooted in long-term capital considerations rather than discretionary lifestyle choices alone.

“Spain’s appeal to wealthy clients has strengthened materially in recent years,” notes Barcelona-based Toni Garcia, Head of Wealth Management Lending, Spain, at Deutsche Bank Private Bank. “Economic growth across the Iberian Peninsula, easing interest rates, and strong tourism flows have all contributed to renewed confidence in the market, with opportunities emerging across residential, hospitality and hybrid assets.”

A compelling proposition

One of Spain’s key differentiators is still relative value. Prime and super prime areas of Madrid and Barcelona still trade at a meaningful discount to comparable locations in London, Paris, Zurich or Milan, while offering top-tier culture, security, and connectivity – a dynamic that continues to attract international capital.

Both Barcelona and Madrid – Europe’s rising UHNW hubs – were ranked among the fastest growing European luxury property markets in H1 2025[1], with prime growth underpinned by international inflows and constrained new supply as high-end buyers increasingly target branded residences and fully refurbished assets.

“For wealthy buyers, Spain offers a compelling combination of lifestyle and practicality: safety, privacy, high-quality healthcare, international schools, strong infrastructure and excellent connectivity,” highlights Garcia. “You can travel to most of Europe from any major Spanish airport within two hours, making Spain well-suited for international business life.”

While Spain’s Golden Visa programme has ended, alternative residency and mobility frameworks continue to support sustained demand.

This momentum is not limited to major mainland cities: established Andalusian southern coast hotspots such as Marbella and Puerto Banús are seeing strong ongoing growth, with both Spanish and international cognoscenti now exploring desirable locations from Málaga all the way to Sotogrande and even past Gibraltar to Tarifa and Cádiz.

The Balearics have also experienced explosive growth in recent years, extending well beyond the vicinity of Palma. Demand is broad across Mallorca, while the ‘boho-chic’ appeal of Ibiza continues to resonate and is increasingly spreading to the quieter and less developed islands of Menorca and Formentera.

“Our business financing properties across the Balearics and the mainland coastline more than doubled last year and we see this trend continuing to accelerate,” says Saydam Salaheddin, Global Head of Real Estate Lending.

“Spanish real estate is proving to be extremely popular not only for traditional European clientele, but increasingly for a broader and more diversified global client base, supported by improved international connectivity,” he adds.

“Spain has reached an international critical mass, where a broadening range of nationalities feel comfortable not only visiting, but establishing a genuine second home that plays a more integral role in family life, rather than serving purely as an occasional holiday residence.”

Spanish hotels and income-producing assets

Hospitality has also emerged as a key pillar of UHNW interest. Spain is widely regarded as one of Europe’s most attractive hotel markets, supported by record occupancy levels, rising average daily rates and higher spending per visitor. Appetite remains strong for trophy hotel assets, with four- and five-star hotels accounting for the majority of recent investment, reflecting a clear pivot toward quality and experience-led tourism.  

“This is an intelligent and conscious decision by the federal and regional governments eager to change perceptions of cheap, alcohol-fuelled revelry on the Costa del Sol, and cultivate a more discerning and higher-spending clientele, focused on quality, culture, and wellness,” comments Salaheddin.

Garcia adds: “With rates improving, income-producing assets start to make sense again, in our view, particularly for long-term investors seeking yield and total return. We see international demand for hotels in all the cities and major beach/island destinations including the Canary Islands.”

For wealthy clients, the most compelling opportunities increasingly sit at the convergence of hotels, branded residences and lifestyle amenities – assets where location-driven scarcity meets diversified income streams. Iconic coastal or urban sites cannot be replicated, and planning restrictions only reinforce long-term value, according to Garcia.

“Given current coastal development regulations, some beachfront hotels in Spain could never be built again today. That makes them priceless for the time being – there is simply nothing else like them,” he says.

How should UHNW buyers think about financing and liquidity?

Used selectively, leverage can play a strategic role for UHNW clients who already own or are acquiring Spanish real estate. Although there are risks to consider related to currency movements, euro-denominated financing may help hedge currency exposure for USD- or GBP-based wealth, preserve liquidity across broader portfolios, and enhance returns on income-producing assets.

“Many clients hold assets in different currencies. Even when they have significant cash, they don’t always want to deploy all of it,” says Garcia. “Financing allows them to manage liquidity and balance their portfolios rather than tying up capital unnecessarily.”

Meanwhile, he highlights, typical non-resident loan-to-value ratios sit in the 50–70% range, with certain client profiles able to access more bespoke solutions, including interest-only tranches and cross-collateralised or Lombard linked structures.

In response to renewed demand, banks have continued to refine non-resident offerings in 2026, introducing mixed rate products and more differentiated pricing by client profile, while full-term fixed-rate solutions are available for moderate loan sizes. With ECB policy rates around 2% at the time of writing, and mortgage competition reemerging, selectively terming out euro debt against core assets can align with wider balance sheet objectives – provided cashflow coverage is robust and potential interest-rate movements taken into account.

“Considering the rate landscape, financing could be seen as a sensible part of an overall investment structure, particularly for income-producing or long-term assets,” Garcia points out.

A local presence and global relationship-driven approach to banking

For Deutsche Bank, one of the key changes in Spain over the past few years has been the integration of private banking, wealth management and business banking, according to Garcia.

“This gives us more flexibility in deal structuring, giving us more room to create innovative tailor-made financing solutions, thereby differentiating us from most high-street lenders,” he says. “Many of our transactions ultimately come down to local presence. Having experienced teams on the ground, supported by senior global real estate specialists based in London, New York and Luxembourg who are active across multiple geographies, makes a meaningful difference.

“At the same time, rising international mobility has deepened collaboration between our teams in Spain and colleagues across the bank’s global network, facilitating more frequent cross-border client engagement.”

Deutsche Bank has more than 100 branches across Spain, with a presence in all 17 autonomous communities[2], complemented by dedicated wealth management offices in key locations. “Foreign customers appreciate being able to pick up the phone or walk into a branch and speak to someone who understands the local market,” Garcia notes.

This is particularly important for internationally mobile clients, agrees Salaheddin.“I was incredibly impressed on recent visits to our high street branches in Palma and Marbella, to hear clients conversing with our staff in multiple local and widely spoken international languages,” he recalls.

“Similarly, the ability for clients to speak in their own language with their trusted local bankers across key international financial centres, while being seamlessly connected to global real estate specialists who can guide them to the right experts in Spain, is a clear differentiator.”

This relationship-driven, on the ground approach provides reassurance when navigating the complexities of cross-border property acquisitions. In a real estate market where nuance matters, knowledge and disciplined decision‑making remain central to unlocking long‑term value.