PART 2 – AGENTS’ AND PROFESSIONALS’ OPINIONS

Agent – Sotogrande

The market has been very resilient and there’s no general drop in prices. There may even be a slight rise at the lower end. Generally optimistic that when travel restrictions are reduced, there is a pent-up demand. There has been considerable investment in infrastructure and hotels in the general Sotogrande area. A few larger properties are being constructed or are on the market and are moving.

Gibraltarian interest in the area was affected when the Spanish authorities started counting them as tax residents, they were resident for more than 183 days. This effect has largely passed through the market.

The opening of the Gibraltar airport to other countries in the Schengen area is likely to lead to an increase in demand.

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Survey Spain in September 2020 – Extract from a Valuation Report

The property value has fallen significantly since our last report, around 19%. Larger properties in the Sotogrande area have struggled in the current market and many have been reduced considerably. Three of the comparables we used in 2017 are still on the market and their listing prices have been reduced by 29%, 12% and 12% respectively. The uncertainty regarding Brexit further exacerbated the depression of the market in this area as it has a population of commuters to Gibraltar.

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Costa de la Luz Tarifa

Costa de la Luz Tarifa

Agent – Manilva

The year wasn’t too bad until November when it really slowed. There appear to be more Spanish buyers in the market, but they are looking for really low deals and most sellers, unless they have special reasons, are holding the prices. Everybody seems to be hanging on and looking forward to a substantial increase in demand when the travel restrictions are lifted, and people can safely come to the country again.

There has been an increase in requirements for outdoor space and though they’ve had fewer sales, the ones that have gone ahead tend to be higher values because of that space requirement. It’s the low level of offers that is stopping deals being done. The media is tending to feed the thought that bargains are available, but in reality, they are not.

There is still a reasonable number of Brits to come out, probably 50% of their enquiries and sales, with the rest being Dutch, Belgian, and German. The Scandinavians tend to be keener on using their own agencies.

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Agent – Manilva

Deal with many nationalities due to their language skills having Spanish, English, Swedish, Norwegian, German, and French speakers in the office. They do deal with a lot of Scandinavians. You cannot push a Scandinavian in the same way as perhaps a British buyer. Scandinavians tend to be reassured by dealing in their own language and especially by getting opinions from other clients.

They are selling and it’s been a reasonable year, but hard. However, there is a great deal of interest and recently they sold a property where the buyers hadn’t seen it other than on the Internet, but they had had friends who’ve gone round it on their behalf.

Again, there is the thought that there is substantial pent-up demand, and it will come along in a snowball effect as this year progresses with travel restrictions reduced and vaccinations increased.

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Agent – Estepona

The market had been reasonable throughout the year, but had definitely slowed from November onwards. It’s very slow at the moment. However, there is definitely a pent-up demand of people wanting to buy, for three reasons.

  1. They’re not able to spend money on holidays or entertainment, and therefore have substantial savings and the ability to buy.
  2. They are fed up with northern Europe’s climate and the restrictions. If they’re going to be restricted, they want to be in an area where the weather is better.
  3. The people want quality time. Priorities have changed.

There are 350 million people in the North of Europe and if they’re going to move somewhere, they don’t want to be too far, and Spain is the best place in the sun. People have been buying properties in Miami, Dubai, or the like, but now don’t want to have all the travel, and will come down to the South of Spain.

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Agent – Marbella

They’ve had a good year, with a strong last three months. Buying has been by a mix of nationalities, mostly northern European. There has been increasing interest, but not purchases, from Spanish, especially in larger properties of 5 million euros plus.

There is optimism regarding the vaccines and the expectation that as demand grows, prices will rise. However, the logistics of vaccinations and restrictions will slow this, especially with regard to buyers of properties at prices of less than a million euros. There’s likely to be a positive uplift from the summer onwards.

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There doesn’t have to be a head office anymore and it can just be where people want to meet anywhere round the world.

Business Centres and Hotels could profit from that.Campbell Ferguson

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Agent – Marbella

Mainly the Norwegian market. They are waiting out Covid and will come back when they are permitted to and it’s safe. Norway has stricter rules on movement. The few who are coming are those wishing to sell their property or those looking for a low price deal. Swedish are much more active as they have fewer movement restrictions.

Prices in January were at a good level, but have all reduced to some extent. It is taking a much longer time to sell properties than it was, largely due to the reduced demand.

As a point of information, although not in the EU, the Norwegians are not restricted to the 90 day stay rule.

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Lawyer – Marbella

They are extremely busy, principally with purchases from British and Scandinavian clients. A few are buying unseen, [being recommended to have a survey first of course] but most have made the visit to Spain or are resident here already. The medium-term outlook is very positive, but there’s a possibility that the further lockdown could turn the market, as within the last few days a few clients have indicated a willingness to sell.

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Sevilla, low hanging fruit

Sevilla, low hanging fruit

Project Manager – Marbella

There is a great deal of construction activity and several developers looking for potential projects. The main focus is on the high and middle ranges, but there is still some interest in the lower end as well.

Most developers and agents are of the opinion that because of Covid there is a pent-up demand for a place in the sun where, if it’s necessary to isolate, at least it’s warm and possible to enjoy the environment. Now that the virus has shown that it is possible to do business from anywhere with Zoom and Skype meetings, then why work from cold and wet northern Europe when they can work from Spain and travel back for face-to-face meetings when absolutely necessary?

Once people are confident to travel by air again, there will be a flood of potential buyers in southern Spain looking for a variety of properties.

Projects starting up now will be delivered in 18 to 24 months, when Covid restrictions should be a thing of the past, and buyers will be ready to take possession.

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Agent – Mijas

Generally, it’s been pretty slow. There are fewer Brits than normal, but they are being replaced by Scandinavians, Belgians, Dutch, etc. Not many Spanish buyers in this area.

Many enquiries are for smaller apartments, but also an increasing number looking for big properties. Main enquires are still the traditional people looking for holiday accommodation, with many intending to retire here in a few years.

It will be slow until the summer and the vaccinations start to have an effect.

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Finance – Mijas

At the beginning of the lockdown, demand fell off a cliff. However, it has gradually returned, but not nearly to the levels as before.

Everyone is waiting for the flights to start again so that people can view properties.

However, they have had a few transactions where the property has been bought without the buyer visiting.

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Eco-Designer, Builder and Valuer – Málaga

A great 2020 and 2021 looks even better.

Scheduled to start on site with 8 new projects in the first half of 2021, clustered around Marbella.

Two additional clients in the design phase / awaiting building licences, and in discussions with 6 strong new prospects, 3 of whom already have their plots.

All the clients who started on site in 2020 were in the design phase when COVID-19 hit in March, and all of them are moving forwards strongly. Site visits are permitted under almost all lockdown restrictions, so apart from a few weeks in March and April, everything continued much as normal in 2020.

All our clients are foreign, and travel restrictions have been a problem. One client drove down from Northern Europe. Another took a private plane. Another couple had Covid, went to hospital, survived, and now consider themselves immune.

We often have meetings by video call, with us on the plot and the client at home in Northern Europe. We can walk around, look at things, discuss the views and orientation. All this works – not as well as face to face but it works.

Travel restrictions have put a lot of people off viewing land with a view to purchase. Some have fallen silent, but others are waiting and will come back once they can travel again.

Let me give you an example of a plus from Covid: a great entrepreneur from Wales. Whenever we have a zoom conversation, he wants to see the view out of our window. It is always warm and sunny here and grey and miserable in Wales. He has said some things very clearly:

  • Life is short: perhaps shorter than we think! He always wanted to build a villa in Spain and now he is.
  • He found as he doesn’t need to go to the office, he might as well be in Spain, as at home in Wales
  • He needs a bigger home because he is working from home.

People’s ambition to transform the quality of their lifestyle has increased as a result of Covid, so that is positive for our business. Our clients have the money or can easily borrow it, so 2021 and beyond looks good.

On the other hand, everyone is expecting a massive financial recession. No-one will be immune. But the only thing I can say with confidence at the moment is there is no sign of it yet.

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Agent – Nerja

Office has been closed for months and all staff working from home. Do we need an office? Yes, for passing trade, but less necessary and fewer need to work from it.

Investment has been pushed to the technology side, with video viewing up 169% from before Covid. They’ve sold the same number of properties in 2020 as in 2019, to 9 different nationalities.

Sellers tend to be up-sizing or down-sizing or moving location, but few leaving.

Prices have maintained their level, and there is a shortage of property. Negotiating discount remains the same at 5-10%. This despite some people, especially Swedes due to incorrect media there, initially offering down to 50% below the asking price.

They deal with Spanish sellers and buyers, but they tend to have a different, perhaps more stubborn, way of negotiating, which always takes longer to break through.

Agent success depends upon effort, as that is what brings the returns.

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Valuer – Almería and Murcia

I’m looking forward to a much more positive year, when things slowly return to some sort of normality! Local developments, more than I can remember for a long time, are still continuing, and we’ve seen buyers from all over, including Madrid.

Apparently, people realising that with home working they can be living anywhere, but with a notable increase in selling villas, rather than apartments.

Prices don’t appear to have suffered much so far. It all depends on stopping the virus, flights resuming, tourists returning and buyers buying! Speak to me again in 3 months!

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Almeria Port

Almeria Port

Architect – Almería

Construction cranes for new developments, on the coast mainly and by Belgian developers.

Buyers are mainly UK citizen and Belgian.

Some UK clients are trying to get Irish passport to keep travel in the EU, and escaping UK politics / Brexit / Covid, moving to live here under the sun. Spain is a secure place and continues to be cheaper for them.

Brexit will be the key for UK citizens that look to live under the sun, but also, we must wait until we know what will happen with the exchange pound / euro. If the euro is very much appreciated in comparison to the pound, people coming to live here will decrease as will real estate market movement.

Through my own experience and having contacts with solicitors, I know foreigner people are not buying bank properties.

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Architect and Valuer – Costa Blanca

From a global perspective, the hope is focused on the efficacy of the vaccines and vaccination programs. From a local perspective, the Valencia region and Costa Blanca will benefit from the agreement of the UK-EU, in terms of new investors and the protection of the British residents.

The demand from other European countries, as from the Spanish market, has to be supported by a recovery of the economy, the free movement in the EU and a containment in the offer prices.

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Cordoba - Great Mosque - Ornate doorway

Cordoba – Great Mosque – Ornate doorway

The Great Mosque – Córdoba

Project Manager and Valuer – Balearics

There is some activity, but it appears to be only the brave (or foolish) dipping their toes into the property market. Viewings and purchases seem to be “online”. Still some developer interest in plots.

As with most crises, the top end of the market is strongest. We expect to start seeing significant falls in other sectors as the year develops.

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Valuer – Barcelona and Balearics

People are holding onto money due to health and economic uncertainty. All of the towns where bars and restaurants were the main entertainment have nothing to fall back on, which is especially the case in Ibiza.

This happens to be where the sharpest decrease in values this year has been reported.

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It’s not the price of the service, it’s the value of the product. That’s what we must sell ourselves on.

That applies to the Spanish Property Market and to the professionals working within it. – Spanish Valuer

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Contributors

Thank you all and compliments on your frankness, in alphabetical order –

Architect – Almería                                              Arquitectos-Peritos-Tasadores 

British Chamber of Commerce in Spain         Eco Vida Homes Enova Estates

El País                                                                    Global Compliance News

Idealista                                                                 James Stewart 

La Opinion Málaga                                              Lawbird Legal Services 

MADE Marbella                                                   Mijas Properties

Murcia Today                                                        My Lawyer in Spain

Mortgage Direct                                                   Olive Press

Panorama                                                              Primrose Real Estate

Property Works                                                    REAS

Scandinavian Property Centre                          Spanish Property Insight

Spanish Property Watch                                    Spanish History in Art and Literature/Eye on Spain

Survey Spain Valuer Almería                            Survey Spain Valuer Costa del Sol

Survey Spain Valuer Granada                           Survey Spain Valuer Tenerife

ThePropertyAgent                                               Team España

ZeroHedge/Tyler Durden

 

Take care and we’ll all get through this.

We’ve just got to work out what sort of world it will be, and what part we will play in it.

Campbell D Ferguson, FRICS, Land Economist.

Chartered Surveyor in Spain. Director. Survey Spain SL.

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Summit of La Concha, Marbella with Gibraltar and Morocco in the Background

Summit of La Concha, Marbella with Gibraltar and Morocco in the Background

P.S. Miscellaneous Cuttings and Information of General Interest found in Research.

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Economic Recovery and Climate Change: Economists argue that building a green recovery will provide jobs quickly, to counter the sharp rise in unemployment resulting from the lockdowns. Insulating homes, installing solar panels and other renewable energy, extending broadband, remodelling cities to make them easier to walk and cycle, planting trees and building flood defences: all are needed to reset national economies on to a low-carbon footing, and all are labour-intensive. While governments are spending trillions to resolve the crisis, this would be spending that also helps to secure a low-carbon and prosperous future.

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Driving: Those British residents who have been continuing to drive without obtaining a Spanish driving licence, now have until the end of June 2021 to obtain the licence or at least apply for it, otherwise they could have to sit a whole new driving test, in Spanish.

There are new driving regulations, which have been initiated at the beginning of this year, but don’t come into full effect until the end of June.

More radar detection, and heavy penalties for using radar detection devices; elimination of the 20 kilometres per hour above the limit that was permitted for overtaking; 50 kilometres per hour for most streets, 30 kilometres per hour for those that are one way, and 20 kilometres per hour for those that are effectively pedestrian streets.

In addition, there will be greater fines for holding mobile phones, whether used or not, and adjusting map browsers while moving. Also, the triangles for advance warning on the roadside are beginning to be replaced by beacon lights that have to be placed on top of a broken-down stationary car, which will become mandatory in 2024.

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Cities Changing: San Francisco has managed to curb the virus slightly in its city – but at what cost? Those paying sky high taxes to live in the Bay Area may soon be wondering why they are paying to live in a shutdown city that state and local government officials have refused to allow to reopen due to a virus with a predicted infection fatality rate of between 0.00002 and 0.093.

The entire downtown area of the city, once vibrant with business and tourism, is now “empty”, according to a new report. Everything from food trucks to local workers used to be sights one would see on a daily basis in San Francisco. Now, the city has been all but abandoned.

Even the tech giants that San Francisco is known for have left the city, in favour of working remotely from elsewhere. Families have moved out of the city in favour of the suburbs. Rents in the city are crashing. Tourists, once part of the lifeblood of the city, are now “scarce”.

Cádiz townscape

Cádiz townscape

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Investment: And then of course, real estate beats stocks hands down in one particular aspect and that’s the value of a home. In these strange times, we have all discovered that our home is a true refuge. Somewhere to take shelter and feel safe from the pandemic raging outside.

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Connection: “Teleworking will make a big difference to where we live. Since we won’t have to live near the office, it will give us more freedom to leave the city and move to more remote areas. Teleworking will also mean many families having to find a home with more rooms, as having an office space will be more important than ever.”

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Internet Searches: “Coronavirus restrictions may have kept people at home, but while there they have been investigating moving to a new house. Two of Spain’s leading real estate multi-listing websites, Idealista and Fotocasa, have seen a surge in property searches over the spring and summer. Fotocasa report an increase of 40% in traffic in June compared to the same month in 2019.

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Valuation: Note that RICS has removed its requirement for a ‘material valuation uncertainty’ caution to be added to all reports, as it is considered that active markets have now taken the effects of the COVID-19 virus protection measures into account. Survey Spain have noted that the Spanish ‘Costa market’ slowed, but did not stop, even during the initial extreme shut down, and has been increasingly active since. Travel restrictions involving quarantining when returning to their ‘home’ country, have made the market activity erratic as potential buyers have not been able to visit, but many Spanish and unrestricted nationalities have continued to buy, some taking advantage of the reduced competition. It has also been noted that some buyers, especially of off-plan and new property, have bought ‘unseen’, with some sellers permitting a limited viewing cancelation clause.

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Survey Spain can value anything that’s not moving.

Cortes de la Frontera - Yurt Hotel (1)

Cortes de la Frontera – Yurt Hotel