Marbella’s unrivalled property boom shows no sign of slowing down.
That is the conclusion of Christopher Clover, Managing Director and owner of Panorama Properties, in this year’s Marbella Property Market Report, widely regarded as the definitive document of trends and developments in the industry.
“It is clear that Marbella has established itself as a safe haven for property purchases, even in times of uncertainty”Christopher Clover, Managing Director and owner of Panorama Properties
Marbella and the surrounding areas reached historic sales levels in 2021, a trend that continued unabated into 2022. In 2021, Marbella registered the highest number of sales in the past 15 years with market demand reaching a staggering 30.15% increase from 2019. Even the toughest pandemic year, 2020, produced surprisingly high numbers of sales.
A new phenomenon was fierce competition between buyers for the same property, with the final price paid sometimes exceeding the asking price.
The elimination of the Wealth Tax in Andalucia, announced on September 19th, will provide an immediate and further increase in the purchase of luxury properties by many buyers and wealthy families who were discouraged from buying in the past due to this tax.
In the area known as the “Golden Triangle”, comprising of the municipalities of Marbella, Estepona and Benahavís, sale closures have been much higher in the first quarter of 2022 compared with the first quarter of 2021. The report reveals increases of 79% in Benahavís, 115% in Estepona and 65% in Marbella.
This incredible increase in the number of property transactions is not only due to the support of the existing buyer market but also to the confidence of many international investors and developers who have chosen Marbella to be the ideal destination to build first class developments and homes, using the latest trends in design and technology.
““The explosion in sales of homes of over €4 million”
Clover highlights another revealing fact, “the explosion in sales of homes of over €4 million”, a category that to date in 2022 has already seen some 150 transactions compared to the 65 registered in 2018. “In view of the data, it is clear that Marbella has established itself as a safe haven for property purchases, even in times of uncertainty such as the present. The interest is such that increased transactions are being conducted virtually, without physical visits, with the help of video, Facetime calls or WhatsApp video calls,” Clover explains.
Current inflation, the sharp increase in construction costs, estimated at 23.5% in 2021, and a demand for properties in Marbella clearly in excess of supply, have inevitably pushed the rise in prices.
Price increases in Marbella from May 2021 to May 2022 have been calculated at 15.8%, with an average asking price of €3,658/m2 (compared to €2,604/m2 in the whole province of Malaga), according to the real estate portal Idealista.
Clover points out that this increase is much more prevalent in the high-end segment of the market, where there are now fewer luxury homes available for sale, leading to price increases. It is also worth mentioning that in the case of high-end properties, 90 per cent of these properties are purchased without mortgages.
In this respect, the report shows that the highest price climbs so far this year have been for top location beachfront apartments, particularly in the renowned urbanisation of Marina de Puente Romano, on the Golden Mile, reaching an astonishing €31,019 per square metre.
This trend of higher demand than supply is expected to continue for the near future. The increase in demand, however, will be offset with some 250 to 270 large-scale construction projects in the pipeline or already begun on the Costa del Sol, together with numerous smaller projects.
The report has found hat between 85 and 90% of luxury property buyers are foreign investors. The British continue to lead the market, despite Brexit (16%), followed by rapidly increasing Swedish market (14%) and Belgians (9%). The French, Dutch and Germans are still present, as of course, are the Spanish.
Unsurprisingly, the Russian market has come to a virtual standstill due to the freezing of assets and accounts. Interestingly, however, Russian investors did not represent a significant share of the market before the invasion, accounting for less than 2.1% in 2021. Since the beginning of the war, there has been an increase in enquiries from countries bordering the war zone, such as Poland, Lithuania, Latvia, Estonia and Romania, who seek refuge in the tranquillity of southern Spain.
Clover emphasises that, despite the current global economic upheaval, Marbella is enjoying an increasing demand for the purchase of real estate with no signs of market slowdown at the beginning of autumn. The geographical location of the area itself, in the sunniest, southernmost point of Europe and far from conflicts is no doubt a contributing factor to the increase in market activity