Sales in the luxury end of the Marbella real estate market hit historic levels
Despite the national and international travel restrictions caused by the Covid-19 crisis, the luxury end of the real estate market in Marbella is more active than ever.
In the past year, from June 21st 2020, since the end of the lockdown in Spain, there has been an unexpected, even exceptional number of property purchases. In 2021, the luxury end of the market (ie properties valued over EUR1 million) has accelerated month-on-month, to a level of activity never seen before.
The above information and much more is included in the newly published Marbella Property Market Report 2021, written by Christopher Clover, Managing Director of Panorama Properties, a real estate agency in Marbella, with more than 50 years’ experience in the city. Looking at the official statistics, during the first quarter of 2021, for the cities of Marbella, Estepona and Benahavís, Clover indicates that there has been an overall increase of 9.2 per cent in sales, compared to the same period of 2020, but especially in Marbella with an increase of 22 per cent.
Panorama also registered an increase of 154.4 per cent in enquiries by potential buyers in the first semester of 2021, compared to the first semester of 2019, which has been a direct result of the pandemic. Additionally, the number of sales (completed or in the process of completion), registered by Panorama in the same period increased by 68 per cent. The average price of these properties sold by Panorama more than doubled (107.5 per cent) compared to 2019.
Panorama anticipates that property prices are currently remaining stable and will start to increase gradually. The increase of 8.56 per cent in the cost of construction registered since the end of the first quarter of 2020 until the end of the first quarter 2021, according to Sociedad de Tasación, also contributes to increases in property prices. It is important to mention that, even though there are properties of all types and prices available on the market, those with prices ranging between 3M€ and 12M€, or even higher, have now become commonplace, properties of a world-class level that simply did not exist before the last crisis and of which we might even see a temporary shortage.
With respect to the nationality of the buyers, 90 per cent of the buyers in the luxury end of the market are foreigners which have given it so much strength during so many years. In 2020, the three main nationalities of the foreign buyers in the province of Málaga were the British (19 per cent), the Swedish (13 per cent) and the Belgians (9 per cent). Despite Brexit and against all predictions, the British have remained by far the greatest foreign nationality buying properties in Spain, and have been so since the late 1970s.
There is also a new profile of buyers in Marbella, the so called “millennials”, the highly successful young professionals with a high level of purchasing power, who choose only the best properties, with the highest level of privacy and the best quality finishes and equipment.
The report indicates that there are no signs of abatement in the demand, to the contrary, a stronger demand is expected during the next few months, as mobility restrictions continue to relax. There are hundreds of clients waiting to come to “seal the deal”. Virtual tours or videocalls are platforms that are being successfully used more and more. Real estate has become again a “safe haven” investment, not only in Marbella but all over the world.
There are many other factors that contribute to the strength and high activity of the Marbella property market: the reduction on Property Transfer Tax to a flat rate of 7 per cent introduced by the Andalusian Government, the historical minimum interest rates on mortgage loans and the progress on the new General Plan of Marbella towards its approval.
With the progress towards free travel and a great percentage of the population being vaccinated, Marbella is currently experiencing a gradual return of quality tourism. Covid has accelerated the trends already prevalent in Marbella during the last 65 years.