Panorama has recently released the 2017 edition of their highly respected Marbella Property Market Report. Written by Managing Director Chris Clover, the report covers the area’s current property status with in-depth facts and figures as well as the potential impact of Brexit on the market…
It is fascinating to see yet another property market cycle commencing in Marbella and the Costa del Sol in general, known for decades as the California of Europe. Marbella is unquestionably the most sophisticated city on the Coast and one of the highest quality environments of the entire Mediterranean Basin.
Residential tourism, that is, tourism based on the purchase and occupancy of second or retirement homes, is one of the many important factors behind the evolution of southern Spain’s most famous stretch of coastline over the last 70 years.
Recent Market Evolution
When the bubble burst towards the end of 2007, most buyers were already wary of prices that had become unrealistically high. During the following years, most waited year after year for the market to touch the bottom. As a result, a strong bottled-up demand from international buyers developed.
The Market touches bottom in 2011
In 2012 and 2013 increasing market activity made it clear that the market had indeed reached its lowest point in 2011, and there was an influx of bargain-seekers rushing to secure properties before prices started to rise. This resulted in a dramatic increase in sales in the subsequent years as reflected in the chart below, with the peak of a 28% increase occurring in 2014 over 2013 sales.
Sales levelling off
This year-on-year increase started to taper off in 2015, reaching only 9.83% in Marbella that year. In 2016, this trend continued and there was even a decrease in sales volume of 8.97% over the 2015 sales. Taking the three municipalities of Marbella, Estepona and Benahavís together, there was a drop of 5.97% on the official index of number of sales in 2016 compared to 2015.
Careful analysis shows that an adjustment in the sales volume after such a deluge of purchases is perfectly normal. Since 2012 most of the distressed properties have been sold even though there remain some excellent bargains in all price categories and most areas.
The majority of buyers who had waited so long were finally able to buy confidently at exceptional prices. Now that the dust has settled, the volume of sales has naturally readjusted to the figures we saw in the pre-crisis years of 2007 as the enclosed graphs illustrate…
Words Chris Clover