PART 2 – AGENTS’ AND PROFESSIONALS’ OPINIONS
Agent – Sotogrande
A very active market, with many people coming and lots of enquiries. Best time we’ve had since before the crisis, and that’s the 2007 one. It’s a mix of the very wealthy and the lower end of the market, with much less in the middle range. There are many young retirees from UK, combined with others who have been locked down by Covid and have had time to think – “do I need the traffic, weather and upsets of Brexit.”
From the agent’s personal experience, offers for his home have been close to the Asking Price, so that he’s now thinking he’ll hold out for that or even lift it. – This could be an indication that prices are starting to rise. (Survey Spain – Evidence from our valuation searches in June still showed prices drifting downwards.)
The area is benefitting hugely from the investments of the owners, Sotogrande SA, with the new 5*GL hotel a major luxury symbol. In addition to this, there are major residential buildings under construction and completed, anticipating future demand. The demand is from many countries, including a sizable % from Spain.
However, demand from the traditionally strong Gibraltar market has weakened, due to uncertainties regarding the proposed inclusion of Gibraltar within the Schengen area. Especially the aggressive Spanish tax authorities identifying some Gibraltarians as Spanish residents, and reportedly seizing more than 200M€ euro from only 90 individuals, as back taxes, interest and fines.
Agent – Manilva
There are more sales than last year. Sellers include about 62% Brits – normally there would be more. However, only 50% of buyers are British and that % is much less than previously, which could be nearer 80%. Travel has been the principal ‘stopper’, but also discovering that Brexit has made them ‘3rd Country buyers’, with additional costs and the restriction of time of continuous stay to 90 days.
The ‘gap’ has been filled by French and Belgians, plus 18% Spanish. Many of the latter are first time buyers, which is encouraging as it shows that the local Spanish economy is perhaps not as dire as people have been stating. They will have had to raise a significant deposit and be confident of their ability to find the monthly mortgage payments.
Many of the sales have been to the lower end of the market, less than 250,000€ euro. Prices have been steady or rising slightly. Many potential buyers come, having been given the impression by their home ‘press’ that the market here has dropped. They make ‘cheeky’ offers and mostly have to go away disappointed.
Most Brits still don’t appear to have a clue of the changes to their status brought about by Brexit.
People are still buying off plan, both for apartments and villas. They take the risk of fixing the prices now, in the hope that they will have risen by the time that the property is ready, and they have to pay the majority of the price.
Agent – Estepona, Benahavis and Marbella
The market is very active, especially at the higher value level, where there is becoming a shortage of supply. In Nueva Andalucía, for example, most of the villas have been sold and apartments are in short supply. In Zagaleta and Monte Mayor, the previous surplus is fast disappearing. All of those comments of course refer to good, attractively located and styled properties.
Prices have remained steady and sales are mostly to end users, not investors.
Many sales are to Nordic buyers, plus Dutch and French. Many Brits buying higher value properties are looking at the advantages for them and their family in acquiring Golden Visa status.
Agent – Marbella
“It’s wild out there, with buyers fighting for overpriced new stuff”
Financial Adviser – Marbella
Many people, especially Brits, are now looking at the Golden Visa route, as it will give them the ability to travel freely, avoid the 90 day rule, and upgrade to full residence when they come to live here full time. And they were going to be buying here anyway so why not?
Accountant – Marbella
We are extremely busy, with existing and new clients. The Golden visa is very attractive to buyers from outside EU, with many Brits now realising this could be the best route for them.
However, the Brits are also discovering the financial disadvantage of 3rd country status as far as property taxes are concerned, which can’t be avoided. It could make the difference between them being able to hold onto the property thanks to income from a few summer lets, and finding the overall costs too much and having to sell. We could see a lot of heart searching as the tax year progresses.
Project Manager – Marbella
Constructionwise, there is still a great deal of activity and several developers looking for potential projects.
The main focus is still on the high and middle range, but there is still some interest in the lower end as well.
Several developers are looking at properties from the banks’ reserves, but the banks are now becoming more selective, and prices of these previously struggling properties are rising.
Most developers and agents are of the opinion that there is still a pent up demand for a place in the sun. One thing Covid has done is show people that, with current methods of communication such as Skype, Zoom and Teams, it is possible to work from anywhere, and if there are to be face-to-face meetings then this can be arranged, especially with restrictions becoming a little easier.
The thoughts tend to be why work and isolate in cold and wet northern Europe, when they can do the same in Spain and travel back for face to face meetings when absolutely necessary.
I believe that once people are confident to travel by air again there will be a flood of potential buyers in southern Spain.
New projects are starting up now to be delivered in between 18 to 24 months when Covid will hopefully be a thing of the past and buyers will be ready to take possession
Agent – Mijas
Getting plenty of enquiries and they’ve had the best 2 months sales for some time. Prices are holding firm with sellers conceding a 5-7% drop from Asking Price.
Mostly to Northern Europeans for second homes, Nordic, German and Dutch. Sales are by owners downsizing, who have been here for many years. Also some who need to go back to their home country to see grandchildren or for health reasons.
The problem is in finding new listings in the middle range of 400,000+€ euro, with a special summer months problem being that many are occupied as holiday lets and the owners don’t want them disturbed by agents or possible buyers.
Agent – Nerja and Málaga
Sales are strong, especially of new build. Rentals too. Viewings and especially rentals are complicated by the varying Covid travel restrictions, both in Spain and in the clients’ home countries, which can lead to increased short-term demand, countered by cancelled bookings. As soon as there is a change, there is a rush in one direction or the other.
Valuer – Almería and Murcia
In general, prices are still showing a tendency to rise. Demand remains strong and will only rise more once travel for Brits becomes easier, despite it being more difficult since Brexit to come and live here.
Tendency for individual houses with gardens to be more in demand, as Covid has changed peoples’ perspective as to what the priorities are in life.
Architect and Valuer – Southern Costa Blanca
In the Alicante area there is a demand for housing by owners with their own home, but who want to improve the conditions of their home by acquiring more space and open areas.
The foreseeable future is uncertain, but is expected to be stable.
Architect and Valuer – Costa Blanca North
The most heard comments from agents in the last six months is that all possible properties to be sold have been sold in this period, so they search for new products. What happened?
The effects of the lockdown: families have increased their capacity to save money, the confrontation of living locked in flats and cities without open spaces and not having any kind of relation to natural environments, the eruption of the online working and the hope of creating an own micro-paradise, to live away from reality.
Market prices for urban, non-urban land and one family houses have been rising continuously after the lockdown of early 2020. The demand has been strong from national and international markets for first and second residencies. However, the market prices are based on the reason for buying prudently and taking a long distance view.
Valuer – Barcelona and Balearics
In Barcelona city there are not many transactions because of the pandemic and already high prices.
There is demand, but they are waiting, expecting prices to be lower with the pandemic, but at the moment that hasn’t happened.
I don’t think that they will go lower, because owners will wait for better times, but also not go higher because they are already higher than the real market.
Investors have stopped because there is no profit, being too high prices to buy and unable to sell higher. Rents are regulated by law now, so there is no margin.
In Catalonia, there is interest in buying residential close to cities, but due to the high prices, there are few real transactions.
The main transactions and market at the moment is in offices, because there is a big demand with no free space left, especially with big floor areas or entire buildings. Now, with pandemic restrictions, even more space per employee is needed, so every building that is finished is already bought or rented. There is a lot of interest buying land to build them, which is expected to continue.
With the office demand and controlling of residential rents, there is unlikely to be many new residential developments in the city.
In the Balearic Islands there is not much demand, only residential with low prices for locals, and some high luxury product, especially for second residence. Also, because this is an expensive product and there are no good locations left, the new build cannot match the real exclusive locations prices.
Another problem with Balearics is the high construction cost, which makes it difficult to get a profit from building.
With high costs and resultant high prices, there is not much demand. Many developers have stopped their new developments, hoping to lower the costs, as otherwise there will be no purchases at the required high price. However, demand does exist if the price is right.
Thank you all and compliments on your frankness, in alphabetical order –
Survey Spain Valuer – Almería
Survey Spain Valuer – Barcelona and Balearics
Survey Spain Valuer – Costa del Sol