Counter intuitive as it may seem, high-end property prices in the Marbella area have increased in recent months. As they say, every cloud has a silver lining, and in this case, it spells optimism in an area we would hardly have expected.
Article by Vivion O’Kelly
Think of a place between the Shetland Islands and Timbuktu where you might like to move to in these challenging times. Well, there is a little island up there named Uyea that has the remains of a building you might like to restore and relocate to, and Mali has its attractions at this time of the year…
Or you might like to move to a luxury villa in Marbella, which is easier to get to and where the weather might be better suited to the clothes you like to wear. These are indeed challenging times, and Christopher Clover, Managing Director of Panorama Properties, Marbella’s longest established real estate agency, surprised us all some months ago with an article published which showed how the current Covid-19 crisis differs from the financial crisis of 2007.
In spite of this historic shock to the world’s economies and the expected recession, banks and most property developers are in a relatively strong position.
This is what he said: “In spite of this historic shock to the world’s economies and the expected recession, banks and most property developers are in a relatively strong position. The market is nowhere near overheating, and prices in the Marbella area (except for prime and ultra-prime properties) have not reached pre-2008 heights. Many have earned and saved a lot of money since the last crisis, and wealthy buyers will seed a demand, in most cases, for very well-priced properties.”
A resilient market
Now, in a follow-up article recently published, he presents solid evidence of healthy market activity in the property sector over the entire summer period, especially since the end of lockdown in Spain, and shows how demand for the higher-end properties in Marbella is increasing as a result of Covid 19, referring to an article published in the Spanish press and the August edition of Essential Marbella Magazine titled “Real estate agencies in Marbella and Mallorca are immune to the Coronavirus.” Here we read, one more time, that demand for high quality residences in the Marbella area has been much stronger than expected over recent months, with many buyers stating their preference for a property better suited to the new life-style reality of the present pandemic, which is essentially the need for open space where new owners can live and work all or part of the year, rather than simply holiday in for a shorter period each year.
Moreover, Christopher writes, such increased demand for high-end properties in the Marballa area is actually a result of Covid 19, and this perspective appears to be shared by many other agencies specializing in luxury properties. This should not surprise us, given that most of us would naturally choose to ride out the pandemic in one of the most desirable locations on the entire continent of Europe.
The resilience of the market is largely due to the high percentage of foreign buyers of high-end Marbella properties, which is to say, properties priced at more than about 800,000 euros. This percentage has remained steady at 80 percent, at least, over many years, and despite the reduced number of foreign visitors to the Costa del Sol as a whole – dropped by half this summer – an exceptionally high number of buyers have travelled to Marbella recently with the express purpose of purchasing a high-end property here.
Enquiries have also increased, with 25 percent more since lockdown ended on June 21st, compared to the same period last year. “The number of properties visited by prospective clients during that period increased by 16 percent. The number of sales signed up in the same period increased by 13 percent. And surprisingly, the average sales prices of properties sold by our agency in this brief two-month period has increased by 55 percent. All this, with a severely reduced number of foreign visitors over the summer months,” says the latest report.
Why the surge in demand?
This surge in demand is due to various factors we can identify. Lifestyle is clearly one of them, and this encompasses location, both geographic and specific: easy communication with the rest of the world and easy communication with local services and attractions. And if natural environment becomes part of the equation, so much the better.
But another factor of increasing importance is architecture and site location: how luxury houses are being built in these times, with special regard to the inside/outside relationship between house, garden and surrounding area. The Safe Harbour is what Christopher Clover calls it, and the description is apt. More than ever now, potential buyers are seeking out properties they will feel safe in, and that means larger gardens, proximity to services as well as nature, comfortable and functional workspaces and high-quality construction.
The expression Safe Harbour also refers to the security of the investment being made in the house. Prime properties have held their value right through the health crisis, while prices for less-than-prime are more negotiable. “There has also been a spurt of sales in the higher end of the market,” says Christopher, “of properties over five million euros, which confirms the total appeal of Marbella not only to the affluent millennials, but also the those who have known Marbella for decades and have decided that now is the time to buy.”
As they say, every cloud has a silver lining, and in this case, it spells optimism in an area we would hardly have expected. It also confirms something we all suspected all along: an exceptional lifestyle will always be the exception to the rule, however bad things may appear to be on the surface, and as long as we can preserve and protect the exceptional environment we live in, more and more people will aspire to it.
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