The property market in Marbella has reached record sales peaks and unprecedented bidding wars

The property market in Marbella has reached record sales peaks and unprecedented bidding wars

The Marbella Property Market Report 2022 published by Panorama Properties highlights the consolidation of Marbella as Europe’s leading quality destination and the great significance of the elimination of the Wealth Tax in Andalucía.

Marbella, 20th September 2022 Over the past year the city of Marbella and the surrounding areas reached historic sales peaks, a trend that has continued unabated into 2022 with frequent competition between buyers for a same highly desirable property, with the final price paid sometimes exceeding the asking price, a phenomenon rarely seen before in the Marbella real estate market. The elimination of the Wealth Tax in Andalucia, announced on September 19^th, will provide an immediate and further increase in the purchase of luxury properties by many buyers and wealthy families who were discouraged from buying in the past due to this tax. This information has been compiled in the “The Marbella Property Market Report 2022”, written by Christopher Clover, Managing Director and owner of Panorama Properties, Marbella’s longest established real estate agency, with over 52 years of experience in the city.

In 2021 Marbella registered the highest number of sales in the last 15 years with market demand reaching a staggering 30.15% increase from 2019. Even the toughest pandemic year, 2020, produced surprisingly high numbers of sales.

In the area known as the “Golden Triangle”, comprised by the municipalities of Marbella, Estepona and Benahavís, sale closures have been much higher in the first quarter of 2022 compared with the first quarter of 2021. The report reveals increases of 79% in Benahavís, 115% in Estepona and 65% in Marbella.

This incredible increase in the number of property transactions is not only due to the support of the existing buyer market but also to the confidence of many international investors and developers who have chosen Marbella to be the ideal destination to build first class developments and homes, using the latest trends in design and technology. Facts such as the reduction in transfer tax (ITP) and VAT and Stamp Duty (AJD) in Andalusia, the reduction and virtual cancellation of inheritance and gift tax, and the the scrapping of the Wealth Tax and the reduction of the personal income tax by 4.3% have also contributed and will continue to contribute to this explosion. Marbella’s recognition as Europe’s Most Exclusive and Prestigious Destination 2022 also contributes to its status as a luxury real estate destination, thanks to high levels of activity throughout the year and the merging of the shoulder seasons of Autumn and Spring thereby eliminating the low season.

Clover highlights another revealing fact, “the explosion in sales of homes of over €4.000.000”, a category that to date in 2022 has already seen some 150 transactions compared to the 65 registered in 2018. “In view of the data, it is clear that Marbella has established itself as a safe haven for property purchases, even in times of uncertainty such as the present. The interest is such that increased transactions are being conducted virtually, without physical visits, with the help of video, Facetime calls or WhatsApp video calls,” Clover explains.

Price increases

Current inflation, the sharp increase in construction costs, estimated at 23.5% in 2021, and a demand for properties in Marbella clearly in excess of supply, have inevitably pushed the rise in prices, as it has worldwide.

Price increases in Marbella from May 2021 to May 2022 have been calculated at 15.8%, with an average asking price of €3,658/m2 (compared to €2,604/m2 in the whole province of Malaga), according to the real estate portal Idealista.

Clover points out that this increase is much more prevalent in the high-end segment of the market, where there are now fewer luxury homes available for sale, leading to price increases.

In this respect, the report shows that the highest price climbs so far this year have been for top location beachfront apartments, particularly in the renowned urbanisation of Marina de Puente Romano, on the Golden Mile, reaching an astonishing €31,019 per square metre.

This trend of higher demand than supply is expected to continue for the near future. However, it is envisaged that the increase in demand will be offset with some 250 to 270 large-scale construction projects in the pipeline or already begun on the Costa del Sol and together with numerous smaller projects.

Buyer’s profile

Progressively younger, between 85 and 90% of luxury property buyers in the Marbella area are of foreign origin. British nationals continue to dominate despite Brexit (16%), followed by the booming Swedish market (14%) and Belgians (9%). The French, Dutch and Germans are still very present, and of course the Spanish, who remain loyal buyers in Marbella. There is mention of the emergence of the Polish market and other nationalities coming from Eastern Europe and the Middle East, as well as an interesting increase in the number of buyers from the USA.

As a result of the conflict between Russia and Ukraine, the Russian market has come to a virtual standstill due to the freezing of its assets and accounts, limiting its buying power. However, the Russian market has not represented a significant share of the market, accounting for less than 2.1% in 2021. Nevertheless, enquiries and sales have been made by buyers from countries bordering the war zone, such as Poland, Lithuania, Latvia, Estonia and Romania, who seek refuge in the tranquillity of southern Spain.

The typical buyer nowadays is looking for new architectural trends that pursue sustainability, a respectful integration with nature, with open spaces, natural light, and vegetation. Regarding style, there is demand for all types: from the most classical to the most modern, including Andalusian architecture. It is also worth mentioning that in the case of high-end properties, 90 per cent of these properties are purchased without mortgages.

Conclusion

Clover emphasizes that, despite the current global economic upheaval, Marbella is enjoying an increasing demand for the purchase of real estate with no signs of market slowdown at the beginning of Autumn. The geographical location of the area itself, in the sunniest, southernmost point of Europe and far from conflicts is no doubt a contributing factor to the increase in market activity

About Panorama Properties Marbella

Panorama, opened in 1970, is the oldest real estate agency in Marbella. It is run by its owner and Director, Christopher Clover, with the collaboration of his children Alex and Katinka.
Panorama specialises in the sale and rental of quality villas, apartments and townhouses in and around the Marbella area.
In August 2015, Christopher accepted a nomination as an Eminent Fellow by the RICS (the Royal Institution of Chartered Surveyors).
Panorama is one of only two residential estate agencies in Spain, and the only residential estate agency on the Costa del Sol, to be independently regulated by RICS.
It has won numerous industry awards. The last of these was the prestigious European Properties Awards in the category Best Real Estate Agency in Spain (individual office) and was in the Top Five of the European final.
The Panorama team is made up of more than 30 qualified and experienced professionals who together speak 13 different languages.

For more information:

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