Marbella property market reports from local estate agency Panorama, written by Managing Director Christopher Clover, are always an interesting read for buyers, vendors, investors, and even owners of property in Marbella. The 2017 report, recently published, paints a broadly positive picture of the market today, and what to expect in the years to come.
Panorama, established in Marbella in 1970 (also Savills associates and RICS regulated), has expertise in the Marbella property market. You can read the full report at Panorama’s website, but if you want to know what to expect, here is a summary of the main points.
Home sales in Marbella levelled off in 2016 after several years of dramatic growth between 2012 – 2015. “Careful analysis shows that an adjustment in the sales volume after such a deluge of purchases is perfectly normal,” argues Chris.
Even so, official sales volumes are back to pre-crisis levels, and higher if you include off-plan sales not yet counted in those figures.
Brexit has hit British demand, but “the increase of other international buyers in Spain more than compensated for the drop in UK buyers.” UK vendors more ready to negotiate their sales price.
House prices in Marbella are on the rise.
Buyers are, in general, better informed and demanding than they were before, with implications for vendors.
As the market has recovered, some vendors have assumed unrealistic price expectation. “Consequently, their properties may not be reaching the marketplace,” explains Chris. “Sellers who really want to sell within a realistic time frame are seeking out quali ed agents who will provide real market comparables, either for sale or already sold and work together to establish a realistic asking price of their property along with a sensible marketing strategy.“
New development activity has jumped from almost nothing in the middle of the last decade to 77 new developments for sale with 2,600 properties starting at €167,000 in the Marbella, Mijas, Fuengirola and Benalmádena area today. Demand for new homes has been strong with many new projects “being sold off plan or under construction and already “sold out” in 2015, 2016, and the first part of 2017.”
Despite Marbella’s 2010 General (Town) Plan being struck down by the courts, forcing the municipality to revert to the 1986 Plan, there is still enough building land available for around 17,000 new homes, so it’s “unlikely that Marbella will run out of development land in the next three or four years.”
Even for building land here are long delays in granting building licences in Marbella as the planning department is in disarray. “This has encouraged buyers to purchase land in the neighbouring municipalities of Benahavís and Estepona where the process is quicker: in these municipalities building licenses can be issued in around three to four months from the submission of the project, whereas right now in Marbella we are told the procedure can often take more than a year.
” Chris goes on to point out that “The serious delay in the concession of building permits in Marbella is causing incalculable damage to investors who bought development and building land in good faith, and indeed, to the very image of Marbella itself.”
Major international funds are investing hundreds of millions of Euro in residential development between Marbella and Sotogrande.
Demand for villas costing over €4m decreased in 2016, but is showing signs of renewed strength in 2017. An estimated 20 to 25 such properties were sold in 2016.
The market is in recovery mode, with resale activity in prime areas at record levels and “new or refurbished properties sometimes achieving prices above the 2006-2007 highs.” However, in other areas there are “ still many exceptionally well-priced resale properties waiting for the right buyer.” That said, “when vendors fix their asking price to the right level where their properties are perceived as very good value for money, there is an almost instant response in the marketplace,” in contrast to years gone buy, when there was no reaction from the market when vendors reduced their expectations and priced to sell.
Looking to the future, Chris forecasts that “that the next few years will probably be characterized by a gradual development and growth of the area rather than a market heading for overheating as before, all depending of course on the economic evolution of the world and the different countries whose citizens comprise the markets for Marbella area real estate.”
As far as new development goes, “The old model of property development of the boom days, where developers would build almost anything and it would sell quickly, moving on rapidly to the next promotion is, thankfully, buried.” New development in the area today is much more thoughtful and focused on quality, ensuring that buyers today are “ finally receiving an increasingly broad choice of new quality properties with different characteristics, prices and locations.”
Sales growth will continue, particularly in municipalities abutting Marbella, where town planning problems will continue to dampen growth for the time being.
Spanish economic growth will boost local demand for property in Marbella, currently now around 20% of the market, down from 35% before 2007.
Time on market for resale properties will fall, assuming vendor price expectations are realistic. “Resale properties that are sensibly priced and well-marketed in all residential areas of Marbella and its outskirts, will sell more quickly than in past years, as the demand for properties increases.”
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