The real estate market in Marbella, as is the case in most of Spain and indeed most of Europe, has been going through a rough patch. The prices went south following the U.S. events of September 2008 and the global credit crunch that followed. Analysts and commentators, however, are of the view that real estate prices in Marbella have hit bottom, which is actually a good thing since property prices can only go up now. This is welcome news, especially given the fact that prices in most of the major cities, including Madrid, are still on a decline.
The greatest reason why the real estate market in Marbella is better than in the rest of Spain is the fact that Marbella is very popular with foreign buyers. The Spanish economy is not doing very well – the country’s rating was recently revised downwards by the major rating agencies. This means the real estate market in the country cannot hope to be rescued by Spaniards.
Countries in Northern Europe are emerging from the financial crisis and it therefore follows that buyers from those countries are more bullish about investing in Spanish holiday homes. The credit crunch did not do much damage to emerging economies (such as BRICS countries, which include Brazil, Russia, India, China, and South Africa) and, as an example, China’s GDP has been growing at an average of 10%. Buyers from these countries and the oil-producing countries of Middle East are also playing a major part in reviving the real estate market in Marbella. The main reason why property prices are not on an upward trend is the fact that there is still caution among buyers who fear that the market has not yet bottomed out.
The real estate market in Marbella is very attractive. In terms of numbers, Marbella is not London’s West End, New York, or Paris. According to a 2001 census of Instituto Nacional de Estadística, Marbella only had 80,172 living units. The number only grew to about 105,000 dwellings by 2009. About 25% of these fall under the ‘luxury’ category. Of these, between 5% and 15% are up for sale (or around 4,000 luxury units). The low supply and the high demand is the reason for the change in fortunes in the Marbella real estate market.
Recent sales for one bedroom homes located on the beachfront are fetching upwards of £100,000.
UK property investors are encouraged to venture into Marbella because Mediterranean coastal resorts are still popular with tourists, despite the global recession. The low prices and interest rates are also making these properties attractive. Yet another reason for the popularity of Marbella properties is the fact that the Malaga airport is served by several low-cost airlines. Banks have been releasing properties that they repossessed since September 2011, further making the property market attractive.
The banks are offering generous mortgage terms to attract buyers, characterized by low deposits and extended non-payment periods. Developers who are stuck with buildings that they want to get rid of are also contributing to the lower prices and to the popularity of the real estate market in Marbella. Although the real estate market has not reached a stage that calls for a rush, buy-to-let propositions are very attractive.
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Alta Vista Spain is a real estate company in Marbella on the Costa del Sol, Spain. Michael Liggan is a driving force and our chief property bargain hunter.