Property Market Report Spain Jan 25: Agents’ and Professionals’ Opinions

PART 2 – AGENTS’ AND PROFESSIONALS’ OPINIONS

• General market comment is that it is booming, especially at the higher value end. An agency reported that it has sold a 14,000 sq m plot in La Zagaleta for 16M€ euro, which was thought to be a record high price at 1,143€ euro per sq m of land.
• Lower value properties are selling, but some even if well priced do appear to be slow to move.
• Town apartments are selling quickly and achieving prices that the locals cannot afford.
• I have had the dilemma of inspecting an older apartment in a town centre for the daughter of a friend. With 3 beds and needing some modernisation but perfectly liveable and should be reasonably prices, it’s ideal for a local family. However, the daughter lives in Switzerland and wants it “just to have somewhere near Mum”, so it will lie empty or be used as a tourist apartment for much of the year. This is exactly the type of property that should not go to outsiders, but the seller of course will accept the highest offer.

Valuer – Sotogrande and Costa del Sol

• Sotogrande has largely recovered from Brexit uncertainty. Property prices have risen significantly over the past couple of years, reflecting continuing interest in its exclusive reputation. Concerns about the lack of a border agreement and time restrictions on residence by non-EU citizens remain matters influencing some future demand, but there are many potential buyers in Spain and the EU for whom such concerns are unimportant
• There is a scarcity of smaller, older homes, especially in the Sotogrande Costa area. These properties are popular, principally by developers, who like them for their prime location and the possibility of profitably transforming them into modern homes for resale.
• Much of the character and exclusive value is maintained by Sotogrande S.A, who have gradually released land and guided development of the whole Estate over the years. The company is rumoured to have been bought by a Saudi investor, and all hope that this will lead to an infusion of new capital investment and greater times for the area as a whole.
• 2025 will undoubtedly be an interesting year, as it will hopefully see a final common sense decision on the Gibraltar border and the identity and ambition of the new owner of Sotogrande SA.
• An immediate neighbour is also to be created by the new owners of La Zagaleta, who have also acquired a huge area between Castellar and Sotogrande, for another top market golf course to be added to La Reserva, Valderrama and the others in the area. Named ‘Majarambuz’ and bordering onto the Polo fields and citrus groves of the Guadarranque valley, the many houses and other facilities promised will further enhance the area.
• In principle, the Resort has been planned along the same exclusive style of La Zagaleta, with four different components: Residential, Hospitality, World Championship Golf, and other leisure and nature-connected features.
• The residential will comprise a total number of 62 single villas and another 40 units of luxury condominiums, hospitality component will consist in a 120-150 keys luxury boutique hotel plus around 120 branded residences in sale & leaseback operation. The resort will also contain equestrian facilities, a commercial area, and bio facilities for the enjoyment of the families and the community in general.

Sotogrande marina, restaurants and shops

Project Manager – Costa del Sol

• What are the major influences changing the market?
  • Prices are now very high, even on resales and people are definitely thinking twice as to whether they should purchase.
• Who is selling and who is buying and why?
  • Still a lot of Scandinavians and Northern and Eastern Europeans.
• Where would you buy now and why?
  • Nueva Andalucia is still a favourite, but for a better deal further away from Marbella, Estepona and the Calahonda area are definitely cheaper.
• Should we all sell and wait for a crash? When will the crash come?
  • I have been saying for years that this bubble must burst but the prices remain high. Selling now is at the top of the market but if you do sell now there will be additional costs of renting while waiting for the market to change.

Valuer – Costa del Sol

• What are the major influences changing the market?
  • Trump is scaring out Americans and Canadians. Polish and Chinese market is strong too.
• Who is selling and who is buying and why?
  • As above. An agent who came to see my house says he is selling constantly. (Edit –“ He would, wouldn’t he!)
• Where would you buy now and why?
  • ◦Estepona, constantly improving.
  • ◦Sotogrande up a lot but most places increasing.
  • ◦Alcaidesa is a hive of activity and looks like it did when the last bubble burst!
• Should we all sell and wait for a crash?
  • Been waiting years now, you said the bubble was due to burst about 7 years ago!

Lawyer – Costa del Sol

• Very buoyant! Amazing. Like other years it’s been somewhat seasonal, being quiet before Christmas and exceptionally busy after New Year. There is an awareness of the problem with affordable social housing. There have been lots of inquiries from people keen to progress.
• Some of the housing is proving to be overpriced for the Brits, with bar owners complaining people are eating sandwiches on the beach rather than going out for dinner.
• There is agreement that there is a problem with water, especially in Málaga city and to the east. However, they’re finding that property financiers don’t concern themselves with environmental matters other than salving their conscience by buying carbon credits. “Let’s just build and we’ll be OK in the South of Spain.” There isn’t a feeling that we’re in a bubble that is going to burst.
• The market is undoubtedly getting younger, and those buyers tend to be more concerned with the environment. There is an increasing interest in sustainability and ensuring the property being considered is as climate friendly as possible.

Lawyer – Costa del Sol

• A very strong start to the year.
• Buyers will work round the absence of the Golden visa and become ‘Nomads’ or obtain one of the other visas.
• Recent buyers are from Denmark, the UK and the US, with the latter being busy for some time.
• Many of the UK buyers are fed up with the country, it’s politics and changing culture, with COVID having concentrated many minds on deciding to move rather than just dreaming of it.
• Where to buy? Marbella as it’s a solid market and also look at Mojacar in Almería.
• There is no sign of a crash, and we are not in a bubble.

Lovely street in Estepona filled with flowers and plants in colourful pots. Costa del Sol, Spain

Building Surveyor – Costa del Sol

• According to some agents, number of sales have slowed down a bit; however, prices are still increasing.

Valuer/Building Surveyor – Granada and Costa del Sol

• I think the domestic market and the foreign market are driven by completely different forces. They are two separate markets one characterised by city centre apartment blocks and the other by villas with pools on the coast.
• I don’t know much about the domestic market, but I have read that compared to the rest of Europe the Spanish economy is doing well.
• As Spanish wages are low and there is no flexibility in mortgage terms offered by Spanish banks, then the main factor driving demand is the euribor followed closely by inheritance tax – and death rates.
• Inheritance tax is quite low in Andalucía. Death rates – not so sure but they are trending downwards as people spend longer in a state of dementia spending the inheritance and there is less available for the grandchildren to spend on down payments. This puts a long-term downward pressure on prices.
• The election of Trump is generally seen as a positive thing by the financial markets, or the USA financial markets. Equally people are also expecting a lot of volatility as he plays with tariffs and creates chaos which is critical for his negotiation style.
• Ironically there are ever more Americans moving to Spain. Certainly, some of them are running away from their divided homeland. They seem better at it than the Brits because they’ve got money.
• Generally, demand is high. Everyone is busy. Plots prices are going up. If 10 is boom and 1 is a crash we are at about 7.5 – not crazy but buoyant – planning laws are restrictive.
• Whatever happens, the long term value of property in Spain is secure because it’s where everyone wants to retire to or have a second home because of the weather, empty motorways, international airports, great food everywhere, beautiful beaches and mountains and friendly host culture (and lots of pretty girls with long dark hair – at least that’s why I came here a long time ago).
• If you think of all the so-called crises in Spanish property over the last 30 years none of them have lasted because we foreigners will put up with anything to be able to live here because it’s such a great place and much better than the alternatives.
• Even the “shocking news” social media posts about how scary it is to buy property in Spain, the donkey murderers, and the maniacal bureaucrats, can’t put people off.

Valuer – Costa Blanca South and Costa Cálida North (Mar Menor and La Manga)

• One of the most relevant influences in the market of Costa Blanca South is the dynamic effect that Orihuela Costa has over the rest of the area. There are still many undeveloped large parcels of land that need national and international investors.
• Orihuela Costa has been leading the offer in the area for many years. As the general situation in Spain and Europe of lower interest rates, more demand, and low availability, prices go up quickly. Orihuela experiences this effect more than the average for the Spanish market due to the strength of the demand.
• On the other hand, we have La Manga and the rest of the Mar Menor coast. Some time has passed since the many articles and information regarding the peak of ecological disaster due to agricultural chemicals leaking into the Mar Menor, when the market here experienced a significant and prolonged dip regarding prices.
• However, in recent months it appears to be recovering, maybe due to the Mar Menor not having lost its picturesque beauty, and its recovering health as time goes by.
• This makes the area very attractive for investment in the next few months, as prices here are not as high as in the Costa Blanca South and they may offer a very profitable result in the long term.

Valuer and Building Surveyor – Alicante

• The housing market is on a brutal rise.
• Prices are skyrocketing and there is moderate growth of purchasers.
• I am of the opinion of being cautious.
• I think the market will not be able to withstand any further rise

Survey Spain Network Valuer – Almeria

• Here in Almeria the property market has been quite active, with modest price rises throughout the year.
• It is thought that this trend will continue in 2025, despite the Sanchez earthquake, which is highly unlikely to happen for a number of reasons or at least not as so darkly painted by the British press.
• Mojacar seems to be enjoying a renaissance, with a new Aldi store under construction and its first major 5 star hotel being built at a cost of 40m on the world class Macenas golf resort. Despite having about 12 four star hotels including a Parador, apart from a couple of boutique 5 star hotels, this will be a first for Mojacar and will only add to its growing appeal.

View to Mediterranean Sea, famous Rock Penon de Ifach in Calp, Valencia province, Costa Blanca, Spain

Valuer – Costa Blanca North and the Balearics

• The Valencian region faces the challenge of recovering its pre-flood standards following the massive destruction caused by the October 2024 flood. The impact on the local economy is difficult to quantify. The extensive damage to private and public properties, as well as infrastructure, will require substantial investment. The consequences for market prices remain unpredictable. Valuation companies are including disclaimers in their reports on properties in the affected areas, noting that current values may experience unexpected fluctuations.
• In contrast, the real estate market in major cities, coastal areas, and the Balearic Islands continues to exhibit strong demand, high activity, and dynamism. Prices have not stabilized and are still rising, driven by robust demand and the growing presence of foreigners, new enterprises, and entrepreneurs. While the strong demand from Russian and Ukrainian citizens is expected to decrease, other nationalities—such as Americans—are representing an increasingly significant share of the market.
• For local citizens, access to housing remains largely unaffordable. Regulations affecting the rental property market are failing to encourage the creation of a sufficient property stock.

Valuer – Catalonia, especially Barcelona, Sitges and Costa Brava, and Majorca

• What are the major influences changing the market?
  • In this moment it is the Mortgage Rates from banks for first homes and not luxury ones, and in second homes, the exchange currency, that is very favourable for dollar and sterling vs euro in this moment.
• Who is selling and who is buying and why?
  • The private owners mostly. Big developers are having to wait to start and marketing new developments because cost prices are too high and they can´t develop at an attractive price for future purchasers.
• Where would you buy now and why?
  • Coast (first line or direct views) and city centres. These areas may not increase price strongly, but will keep increasing because there is always demand, and regulations will reduce more new developments, so there is more demand than supply.
• Should we all sell and wait for a crash?
  • No, and especially in these areas mentioned above. All the time there is less supply and higher prices, but the demand keeps increasing. Inflation and prices increase quicker than salaries, so there is an increasingly gap and distance between the money saved and the price of the properties.

Contributors