Marbella Property Market report 2019
Now is a good time to look back at last year and review the status of the Marbella property market. The Costa del Sol property has been showing strong growth since 2014, the year when we finally felt we had come out of the brutal recession years.
As everyone living on the coast has witnessed, property developers regained their confidence in the area and a significant number of new developments in Marbella and along the coast have been constructed and have been selling out at speed. In the recession years buyers were looking for distressed sales, but this trend quickly switched to a preference for new off-plan homes in the contemporary style, once the growth phase really kicked off.
Western Costa del Sol, and in particular Marbella, saw faster rates of recovery in property sales than other parts of Spain, largely thanks to its reputation as a region that offers an excellent lifestyle and climate, and because it has for decades been a favoured location for second homes. The property market here is one of the most dynamic in Spain, and that still holds true.
We have witnessed a change in location preference over the last few years. Whilst Marbella has always been popular, it has now been joined by Benahavís and Estepona, to form what has become known as ‘The Golden Triangle’. Estepona, and its New Golden Mile in particular, attracted a new swathe of luxury new developments and buyers from across Europe. Much of this is due to the growth in amenities in Estepona, and the town council’s efforts to create a dynamic residential area.
A slowing of growth
Although the Brexit vote in June 2016 caused a small blip in sales, in 2017 the market surged back and British buyers returned in that new wave. However, in 2018, we definitely noticed a slowing down in sales, especially in the second half of 2018. It could be said that the market was stabilising rather than slowing down. This stabilisation continued in 2019. Some may make gloomy forecasts based on this, however, if the present level of sales holds, then there is reason for cautious optimism. On the other hand, as market experts point out, a levelling off of sales has a tendency to be followed by a further drop.
What is causing this market slow-down?
Demand from European buyers has been solid until now, with investors from the Scandinavian countries flocking to buy the contemporary new builds. We have also witnessed exceptional growth in buyers aged under 50, attracted by improved flight connections from Málaga to destinations across Europe and the rest of the world. Marbella has had several exceptional tourism season in consecutive years, and yet in 2019, demand for properties declined slightly.
There are those who blame Brexit, and indeed the uncertainty that still lingers around this may have dissuaded some British buyers from buying in Spain. However, the root cause is more realistically in the property market itself.
When demand for the contemporary styled properties surged, property developers rushed to deliver new homes. Now supply has exceeded demand. Furthermore, many of the projects offered the same mix of architecture, amenities and price. As a result, there is too much competition in addition to an over-supply, mostly in the mid-price range. And, some properties are being over-priced because during the growth years, the land values have risen faster than the value of the properties built on the ever-dwindling number of plots. This puts pressure on developers, who then have to raise prices, and these new prices are off-putting for buyers. This is particularly true when there is so much choice available.
We must factor in global economic conditions into any assessment of the market, and with warnings about the possibility of another recession being sounded, it is only to be expected that Marbella will see a lull in incoming investment. A cooling down of land values and construction costs would help to retain a healthy market, as would more diversity in architectural styles, and the development of more niche projects. Certainly we expect ultra-luxury developments with a unique twist to do well, and the top of the market will remain more resilient than the mid-range sector.
Ultimately, we need to face the current conditions head on, rather than hide from them, and encourage developers and planners to come up with new residential concepts that will create a new demand for properties in Marbella and along the Costa del Sol.
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We were more than happy with the services received from Aqua Estate. Sebastian had all the patience in the world, showing us some twenty properties, never being disappointed when we said no again and happy to come up with more properties to show. Most importantly , he presented us those which were within our price range, not wasting our time with more expensive ones, as so many agents do. Besides his positive attitude, his knowledge and advice were invaluable. Even after the deal was done, he continued to help us with various matters. Last but not least, the entire team of Aqua Estate shows the same high level of dedication. Why would anybody choose a different agent in Marbella ?
We highly recommend Sebastian Jimenez and his agency Aqua Estates. Sebastian is extremely kind and patient, no query, no task is too much for him at any time. Moreover, he is very efficient, helpful and understanding, even if we wanted to inspect a property for the third time, only to continue the search. Sebastian never imposes with his own taste or opinion, however convinces with his professional and local market knowledge. House hunting with Sebastian was a real pleasure and a successful one too as we just moved in with his help into a fantastic apartment on the coast. AND after sales assistance is not only a promotional promise, but was happily offered.
Hello Sebastian, it is with pleasure that we, my wife and I, testify to your professionalism and your attention regarding the purchase of our first property in Spain 4 and a half years ago and of our new house in which we will be moving in October 2021. We have found in you, listening, competence and besides that is why we have remained faithful to you for 5 years, and that we have recommended you to all our friends.
I’ve been with Aqua Estates for 12 years, and have bought and sold various properties with them but I’ll make it short: I wouldn’t even think of using someone else.