Marbella Real Estate Market in 2016

As we study the real estate market on the Costa del Sol one thing quickly becomes clear: the demand for luxury real estate and lifestyles in Marbella remains as strong as ever. There are naturally many factors affecting the property market right now, but it is against this framework of robust demand that the Marbella real estate sector is currently playing out.

Sustainable demand in 2017

Does the above mean that Marbella is enjoying a property boom, as it did in the first half of the 2000s? Actually no. The conditions back then were a classic example of a seller’s market and those today are more balanced. We have moved well out of the recession of the crisis years between 2009 and 2013, overcoming also the challenge of Brexit to record healthy sales figures, but this is a market that is well-balanced at present and for now shows no signs of overheating.

Interestingly enough, this is the way many prefer it to be. Speak to experienced property agents, developers, bankers, investors and business owners and they will tell you that they would trade the madness of a boom for the more mature and sustainable growth of the present moment. “We share this sentiment,” says the founding director of Marbella Hills Homes, Evelin Ortega, whose almost 20 years in the real estate sector have taught her that big booms are followed by volatile times.

The more stable conditions seen now are reflected by very solid interest from especially Scandinavian and Belgian buyers, followed by Dutch, French, Middle Eastern and Moroccan buyers. Though it has been impacted by a low pound the British market continues to be important, while there are signs of growth potential in the German, Russian, Italian, Asian and American markets, as well as the national one. “Brexit shows just how important it is not to rely on one market too much, and with this diversity of buyers Marbella is in a good position.”

What are these people looking for? Well, in the first case we believe Marbella attracts homebuyers that come here for the unique lifestyle and quality of life it offers. “It is only after people have been seduced by the climate, the magnificent setting and views, the lively cosmopolitan atmosphere and the free outdoor way of life that they begin to think about buying a property, so you could say that homebuyers in Marbella look for properties that fit the lifestyle they intend to enjoy here.”

Properties for sale in 2017

And when it comes to properties, the majority of buyers are looking for a Marbella home that is contemporary in what it offers. “This includes modern architectural styling, although there has been a bit of a move away from pure white minimalism, but also very important are bright open-plan living areas that open up to spacious terraces,” says Evelin. True sex appeal comes in the form of modern kitchens and bathrooms, and terraces with space for chill-out lounges and Jacuzzis or plunge pools.”

Much of the new development satisfying this demand is taking place in Estepona, Benahavis and also Ojén and Mijas, but in spite of the planning issues that Marbella is undergoing there is still a very good supply of modern developments in Nueva Andalucía, eastern Marbella and the Golden Mile. “This applies to luxury new apartment complexes and small gated developments of exclusive villas, so buyers have a very good choice of properties and locations, including frontline beach and just inland.”

Though the main demand is for new developments, resale properties continue to play a big part in the market. “First there are the almost-new properties that are easy to modernise, and then a wide choice of villas and apartments that owners can choose to renovate or maintain in a more classical, Andalusian or colonial style. They offer more land and property for your money, so if you have the inclination buying an older property to renovate can make a great investment. It’s a trade-off between the convenience of a new property and the greater space and sometimes better location of an older house.”

Price movements in 2017

During the recession prices fell by as much as 30-40% from their peak in 2007/2008, which many considered to be a price correction that was needed anyway. Property values in Marbella stabilised in 2012/2013 and have been climbing steadily since. The rate of this price recovery is not aggressive but consistent and sustained, and it confirms what we said earlier: that the Marbella property market is right now in a period of strong but controlled and sustainable growth.

The more attractive properties in the better areas never really lost much value and many are now worth more than in 2008. Those weaker properties that lost more value during the crisis have regained most of their value, but the pace of growth is one that is appealing to buyers and investors but does not drive pure short-term speculation. “Of course we have investor and business buyers, but from our own experience the vast majority of property buyers in Marbella right now are private owners who are motivated by the lifestyle, not just returns.”

Trends beyond 2017

Though the British market will not recover fully from Brexit in the short term it is balanced by growing demand from other markets such as Scandinavia, the Benelux, France and the Middle East. “You can say with confidence that the crisis years are well behind us and we are in the middle of a period of sustainable growth that still has the potential to accelerate. Supply and demand is well balanced with new and resale alternatives to choose from, and prices are growing in a healthy way but not getting close to creating a bubble.”

The conditions are therefore good, and Marbella’s current building limitations are bringing new areas such as La Alquería, Nueva Alcántara, the New Golden Mile and La Mairena to the public’s attention. “This is a good development, though the luxury buyer with the means still often chooses top locations such as the Golden Mile, Nueva Andalucía, La Zagaleta and Los Monteros. The number and quality of restaurants, nightlife, sports facilities, spas, shopping, schools and also culture is what draws such buyers here, and it keeps improving, With skiing in the Sierra Nevada, surfing in Tarifa, country cities like Seville and Granada, and Málaga being called ‘The new Barcelona’ by Lonely Planet, Marbella continues to have five-star deluxe appeal.

Total number of properties sold in Marbella, Benahavis and Estepona.