By Campbell D. Ferguson, FRICS
Survey Spain – RICS Chartered Surveyors in Spain
Many local professionals have joined the popular LinkedIn ‘Marbella Real Estate Opportunities’ group. They have raised potentially vexed issues such as the economy, the effect that banks’ virtual freezing of finance has on the property market, the potential promised by Marbella’s new marina, the city’s PGOU (Plan General de Ordenación Urbana) or urban planning law, new projects and the Mediterranean corridor’s appeal to buyers and investors, etc…
Campbell’s predictions for the year ahead include:
- 2012 will be a difficult time for those living in Spain and businesses wholly dependent on the Spanish economy.
- The newly elected Partido Popular government will have no choice but to raise taxes and cut benefits and services, as governments have been forced to do elsewhere in Europe and the developed world.
- Spain might even experience some pockets of unrest as its citizens begin to realise that the concept of a job for life is unsupportable and a thing of the past.
- Spain’s banks will still struggle to clear the bulk of the properties on their books as the price of most of it is still too high, but revaluing all assets and debts has the potential to make the situation worse – for the banks and therefore the country dependent upon the flow of credit – so they will be loathe to lower prices across the board to a level that would give them a better chance of selling.
On a more positive note he observed that:
- The Costa del Sol is well placed to benefit from any new wealth created in Northern Europe, as it continues to be one of the most desirable places in the world to live and visit.
- Unless handled correctly, Marbella’s new marina could merely transfer commercial business from existing areas, creating little real long-term opportunities locally except for construction jobs. On the other hand, the project will attract cruise ships to the area, resulting in an opportunity for Marbella to increase its retail and catering income.
- With the increased direct marketing of the liners’ passengers’ personal recommendations of good experience during their visit, it will lead to new growth for local businesses in the longer term.
- That can all be negated by poor or off-hand service and ‘rip-offs’, and the Town Hall and business associations must be constantly working to improve the quality of the passengers’ experience.
Clearing the PGOU ‘cobwebs’
- The issues surrounding Banana Beach and other unresolved development planning and safety infringements still threaten demolition of property. It’s a conflict between the rule of law and compassion for ‘in good faith’ purchasers, which has no correct answer.
- Marbella’s Town Hall, others on the Costa del Sol and the Junta de Andalucía, should throw themselves into creating jobs and helping businesses through the recession and stop obsessing about more residential promotions. There is already far too much unoccupied housing in the area.
- In essence, Spain needs to wean itself off the construction habit and seek new business opportunities and solutions for a new era to bring more people committed to working and living in the area.
- The most beneficial types of buyers and investors will only be attracted by the possibility of profit and quality of life. Fortunately, their presence in Marbella will not only depend on the economies of Spain and the EU region stabilising, but as stated above on the internationality of the inward investment. It should become a major growth point in Spain.
The final word on the possibilities for 2012 isn’t pessimistic: “It’s going to be a hard year, but there will definitely be pockets of profit for the enterprising. Remember that you’re closer to the next upsurge during a downturn than you are at the height of the previous boom. The profit is made in the buying and not the sale.”
