Marbella Property Market Update 2016

Spanish Special Part I: New report reveals truth behind Spain’s most glamourous coastline

A new report has provided honest and detailed insights into the Marbella property market, giving an overview of everything from price trends to stock levels and the most sought after areas in the chic Spanish city.

The Marbella Property Market Report 2016, from Panorama Properties Marbella, the area’s longest established real estate agency, resists the usual inclination to view the market through rose-tinted glasses and instead delivers a well documented and experiencedassessment of the state of the sector. Christopher Clover, Panorama’s Managing Director, has been writing about the Marbella property market for more than 46 years. He is a Fellow of the Royal Institution of Chartered Surveyors, and Panorama is now the international associate agency for Savills in the Marbella area.

Christopher comments,

“With the 2016 Marbella Property Market Report, we wanted to produce in depth insights into how the market has fared since the 2007/08 bubble burst. There are some excellent headlines and much to celebrate, but there are also some cautionary notes within the report. The purpose was not to gloss over these factors but provide a thorough picture of where the property market in Marbella really stands.”

Marbella property sales up 9.83% in 2015

The headline figures are certainly positive. Marbella has enjoyed five years of recovery, with the volume of residential sales rising by 9.83% in 2015. The city has raced ahead of national performance thanks to its multi-country source market, which has positioned Marbella at the forefront of the Spanish property market recovery.

4,390 properties were sold in Marbella in 2015. The figure is less than 1% behind the 2006 pre-crisis boom year figure of 4,432. The rate at which sales volumes increased calmed somewhat during 2015, following the heady increases of 24% in 2013 and 28% in 2014, as pent-up demand (while buyers waited for prices to bottom out and then seized on the chance to buy bargains) for properties in Marbella has been satisfied.

Marbella property prices still 10-20% below peak levels

Interestingly, despite all those bargain hunters rushing to pick up their dream Marbella property in 2013 and 2014, there are still plenty of affordable homes on the market. Prices in Marbella remain broadly at around 20% below their peak, rising to just 10% to 15% below peak in the most desirable areas. Nationally, prices remain at 28.4% below peak levels, according to the Spanish Registradores.

The strong upturn in the Marbella property market is also highlighted by figures from the Colegio de Arquitectos of Malaga, which show a sharp increase in the number of completed residential construction projects in 2015, following years of steady decline.

High-end sales increased by 30%

The market’s return to life has been particularly noticeable for high-end properties, which are defined in the Panorama Properties Marbella report as those worth €4 million or more. Over 100 sales of such properties were completed in the greater Marbella area during 2015, up 30% above the 2014 figure.

Marbella’s market has grown for several reasons. The city enjoys a true twelve month season, with few other Mediterranean destinations able to rival it. The weak Euro, competitive pricing and low mortgage rates have all contributed, as have the potential for high yields and the perception of Marbella as offering a safe haven of quality within the EU.

The coast west of Marbella looks to be the most promising investment prospect for high-end properties in the next few years. The bellwether Sotogrande development was purchased by top US and European funds, Cerberus Capital Management and Orion Capital in late 2014, with a range of stunning projects planned to appeal to the wealthiest buyers.

Further evidence of investment in the high-end of the market was seen in January 2016, when La Zagaleta UK Ltd purchased the Valderrama golf club and nearby development land. Their initial investment of €40 million is set to be backed by a further €200 million of planned development over the coming decade.

From land plots to properties, price increase trends in Marbella look set to continue, making the city and surrounding area an excellent investment prospect for the years ahead. Mr. Clover highlights that although sales volume has picked up, prices still have a long way to go, and current price levels are around those of 2004.  In his opinion, any property bought at today’s market price should provide excellent capital appreciation in the years to come.

Part II of the Spanish Special from Panorama Properties Marbella will focus on the people trends impacting Marbella’s property market, including Brexit, Iranian buyers and future forecasts. The release will be available from 07/06/16.

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