Property Market Quarterly Report – Winter 2019 – Part II

The Overall Market – An underlying optimism that things are getting better, with good demand in most areas. Brexit is causing some hesitation, especially by British buyers, but other nationalities are continuing to buy.

The market in individual Municipalities and Areas – Reports from agents and valuers.

(Note that within these areas there are many variations in general value, even down to the level of neighbouring urbanisations, frontline golf or beach, etc)

• San Roque (Sotogrande, etc) and country area nearby.
  • The comments are similar to before. There is little movement in the higher values as most wait to see how Gibraltar and the area are to be affected by Brexit. The market is composed of two types of sellers, being those with a price they feel the property is worth and sticking to that, and others who need to sell and who are prepared to accept an offer, sometimes significantly below the asking price.
  • There is a feeling of pent-up demand that should be released once the uncertainty disappears.
  • Alcaidesa has a good rental market for workers in Gibraltar, especially with the increase in values being seen in Gibraltar. 
  • Many other buyers in Alcaidesa are there for holiday homes, with golfers especially coming for months in the winter when northern European courses are closed. The values are generally well below those of Sotogrande.
• Casares, Gaucín and Manilva
  • Properties with good views, especially down the valleys to the sea are selling. Good prices are achieved for properties on the Estepona side of Casares, where the agent reported a shortage of property, but they drop away steeply on the other side of the mountain and towards Gaucín. 
  • Last year had been one of the best for the country agent, who also stated he was hoping this year would be the same as country properties tend to be a year or so behind the coastal market and he has been watching that boom.
• Estepona and Benahavís
  • The market is definitely on the ‘up and up’. Buyers are well informed and negotiating strongly, but sellers are more confident and not giving properties away.
  • New properties in the right locations are selling immediately they are announced, with Nordic, Dutch and Belgian clients being strong, but weak Spanish interest. Maybe because they will use Spanish agencies. Northern Europeans are attracted by the higher standard of insulation and finish, and resultant lower running costs, perhaps closer to what they have at home; and also, by large terraces for the ‘outdoor’ life.
  • Rentals are constantly good, with short-term especially so, leading to investment interest. The present and proposed changes to the short-term and long term legislation has not really had an effect yet.
• Marbella 
  • Demand continues in the town, with the name attracting many high value buyers.
  • The slowness in awarding permissions and restrictions on development are easing, so that more cranes and new development is increasing.
  • Due to the restrictions, and continuing demand, prices are rising in the best areas. However, some of the supply is appearing to be dated, especially with regard to the energy use and general comfort. This is likely to be an increasing problem throughout the coast.
  • Demand is worldwide and it is the place where Spanish demand is strongest.
• Mijas, Fuengirola and Benalmádena
  • Lack of good new product, as last year was their best. Good customer attention is essential.
  • Apartment sales are slow.
  • If prices are dropping, it’s because sellers have been unrealistic in their expectations.
  • Buyers are from France, Portugal, UK, USA, all over.
• Costa del Sol East and ‘Inland Spain’.
  • Still improving with steady stream of potential buyers. 
  • Comparatively little new build for the expat market.
  • Poor permissions hold back many properties, so the improvement in regularising the market should help.
• Almería, Murcia and Alicante South
  • Cranes all over the place, is what’s seen as one travels around.
  • However, the price increases are slowing, probably due to Brexit and currency uncertainties, especially in the retiree market.
  • Many different nationalities buying, perhaps more so than before.
• Costa Blanca North
  • There are various sectors to the market, dictated by the geography.
    • Inland properties are seeing a slow market that is well behind any increases on the coast.
    • Denia, to the north of the Montgo mountain, has stable prices near the coast, with further up the hill being of lesser value.
    • Spanish banks are active in development, appearing to be involved directly at times.
    • The main focus at the moment is on the German market.
    • On the S side of Montgo, including Javea and round to Calpe on the S coast, values are much higher. The focus is on luxury and many sites are being developed for a few modern style villas.
  • There is strong Eastern European demand, which doesn’t emphasise the environment, whilst other nationalities tend to want the whole area to be good.
  • The Spanish market is still very depressed.
• Balearics – Ibiza
  • Properties are going more and more up-market.
  • The prohibitions on development in Rustic and Forest land, are making existing properties more valuable, especially if they are fully legal, as so many are not and difficult to sell.
  • Buy to Rent market in villas, but not so much in apartments. 
  • Apartments need to have sea views to be attractive.
  • British demand is weak or hesitant, but strong interest from Belgium, Scandinavia and even Iceland.
  • “There is always somebody, somewhere with money who wants the sun and islands.”
• General
• An upbeat report reflecting the views from the market.
• There is still concern at the uncertainty of the effects of Brexit, for both the UK and the EU as a whole, but many are just carrying on hoping that they’ll be able to deal with what is decided.
• The changes to the Rental law are significant and will affect both buyers and lenders. Combined with the restrictions on seasonal letting, they could slow down the buyer intending to use the rental income as a means of paying the mortgage and thus affording to purchase the property.
• By the time the next report is issued, all the elections mentioned at the start will have been held and, who knows, even Brexit could have been completed or abandoned, all of which will undoubtedly affect the property market.