Property valuation firm warn about shortage of new product as the real estate market in Marbella continues to recover.
Although in Spain as a whole, there is a remaining important quantity of unsold properties, it also exists an important force driving the market in certain areas of special interest and for certain markets which are certainly distinct from the rest of Spain.
Being the interest of these comments the Costa del Sol as a whole and more specifically Marbella and its surrounding municipalities we will rely in the information provided by TINSA, perhaps the most important property valuation firm in Spain in his 2015 report which analyses the property market in Spain in general and also in specific areas.
In this report, TINSA calls for the construction of new developments to supply the demand of the foreign market for holiday homes as the offer in these areas at the moment could be considered residual from the important stock of homes affected by the harsh times of the past years.
If we do consider the main 3 areas where our company maintains a strong presence, say Marbella Benahavis and Mijas Costa we can observe that these areas have stood as exceptions that in a way confirmed the fact that the so called slowdown in sales was never a great problem here as foreign customers took advantage of the market price reductions to purchase unsold stock of new homes as well as to acquire desirable properties at a fraction of their original price pumped up for a sort of fever during the first years of this century.
Foreign clients demand push the property Market in Marbella, Benahavis and Mijas Costa and they focus and drive property developers to their demand for new, unique product with emphasis in modern contemporary design, luxury and equipped with the latest advances in home technologies not easily available during the previous decade and now considered essential.
This demand has finished with the then existing stocks of homes and now is putting pressure for more product. Some new developments have already started to be sold, and a good example would be a recent release in the Mijas Costa municipality, almost in the limit with Marbella, where the first 30 units released for sale were sold in just a couple of weeks. Foreign investment funds are also active in the area either with new projects or completing unfinished projects started right before the crash which started around 2006.
Buyers from Scandinavia, Ireland, the UK, France, the return of the Persian Gulf clients and also North of Africa have taught the market several lessons with an estimate 60% of the sales in the last year. Perhaps calling them foreign investors would be an overstatement as the majority of the purchases were lifestyle purchases to end users of previously expensive property at heavily discounted prices, the TINSA report says that prices are still 41% below their maximums, here we can see how Marbella pulls from the train as all other areas even in the desired Costa del Sol are in levels between 60% down in the case of Casares and an average around 50% in other coastal areas, this is the eternal effect of demand and offer.
For 2014, authorities inform of almost 4,000 sales executed which is approximately 30% more than the previous year and altogether more than in 2006.
Among these sales we can observe that the increase of the segment of new property was over 100% confirming the view of professionals when analysing their results. Currently there is a lot of competition for scarce offer of new properties in new developments as the demand of most of the buyers is set on this type of homes.
TINSA also remarks that between Malaga and Mijas, there is an existing stock of unsold developments which is being steadily sold and it might represent some 2 years of availability for the market demands.
They also inform of the request for building plots as the developers study their chances to start building again as well as promoters search for opportunities for investment to a much saner demand which practically do not need financing as in the most desired areas, some 70% of the sales are without financing required whereas in the rest of the areas, 60% of the buyers receive support from banks in the way of mortgages.
We kindly invite you to contact us at PerfectMarbella.com for expert advice if you are considering an investment in the Costa del Sol especially between Mijas Costa, Marbella and Benahavis. We have direct access to different interesting opportunities in the most desirable areas according to your dreams.
Reference: TINSA 2015 report at: