Update on the Costa del Sol Property Market – Winter 2021/2
In the second of our two webinars, we looked at the Costa del Sol Property Market in the Winter of 2021/22. We were joined in Sean Cannon, Sales Director at Panorama Marbella and Keith Spitalnick, owner of Target Property Spain. They talked with Alex about the current state of the Costa del Sol market as well as what the future holds.
Panorama covers the area from from East Marbella to Estepona to Sierra Blanca. The average price has increased greatly by 60% Average prices were ranging from 200,000€ to 1.2M / 1.3M. Now they are looking at 400k to 12 million.
The market has been lead by the reduction in transfer taxes being extended in Andalucia where the previous 10% tax has been reduced to 7%.
After lockdown there has been a pent-up demand for lifestyle change. People have been able to manage their businesses from home and enjoy the weather and lifestyle in Spain.
Keith advised that Target had seen the average price over the last 20 sales rising to just below 500K. For the area Target specialise in, east Marbella (Elviria) to Fuengirola / Mijas Costa, it is difficult to find homes under 200,000€.
How did 2021 fare?
Panorama saw a growth in sales in the year from July 20/July 21 by 60% of sales volume. Due to lack of supply of stock, Agents need to be getting the best listings.
Target’s last 10 sales were to 8 different nationalities majority of whom were outside Europe. Buyers are now a different age demographic with millennials from places like Hong King, Sydney, New York, New Zealand. They are mainly digital nomads who can work online.
What nationalities in 2021?
Dominant nationality for 2021 which Target experienced in the first half did not include any UK Nationals. The first half of the year was mainly to facilitate buyers looking for permanent homes. Second half was working with UK Nationals getting priorities sorted.
Sean advised that the first 6 months of 2021 was quiet at Panorama for UK Nationals and Irish clients with mainly Belgium, Swedens, Dutch and French buyers.
Did prices go up last year and this year?
Starting to see prices increase a little were Target and hopeful the situation stays under control. Generally there is a lack of stock. There are still opportunities, but these are fewer and far between and most are getting snapped up on the back of a video call. Since pandemic buying online has become normal, with Clients buying sight unseen.
Panorama had also seen a slow turn on price increases. Market has been so hot for last year. If stock is not there, and demand too, then this gives the seller an element of power. They have had 5-6 properties with bidding wars. Owners are not giving much discount. The demand for properties beach side, or new Golden Mile are very high. Vendors are staying put with pricing at 10/15% above asking price. In the greater Marbella area more modern, fully furnished, kitted-out homes are in high demand. The area at Zagaleta finished and updated properties are selling fast with old houses staying on market longer.
Advice for Buyers
If you are looking in the Marbella area, Sean at Panorama advised the most important thing for buyers is the speed of transaction and level of demand. Find a good lawyer and arrange the paperwork needed – NIE, bank account etc so there is no delay and can immediately buy.
Keith of Target advised that it used to be to do your research but now the Buyers have done all that research before. Have all ducks lined up with Mortgage pre-approved. Most agents now keeping their own listings and not sharing around, or on a multi-listing system and marketing to database. If you are looking for a specific area ask the Agents who specialise in that area and get them to find you a pocket listing.
Sean advised Buyers need to be able to be in a position to offer the asking price before they view. They now have a waiting list of Clients who want a specific area and then its an open bid system. There then maybe a second round for people bidding at the same time. The Buyer offering the highest price walks away and this is in first time in 15 years that he has seen that happen. It means the Seller can get the very best price for the property. Some properties need to have a reasonable bid offered and then educate the buyer in the market and find a sensible middle ground and then move forward.
Alex advised that it’s important for foreign buyers to get their Powers of Attorney, NIE application and Mortgage in place.
Advice for Sellers
Target are certainly seeing that it is a sellers market at the moment so it’s important for them to make sure they are ready to sell. Organise the next move, if staying in country and need to find another place to go and live in. If you are getting an offer and its palatable take it. Timing is important; the right buyer, with the right product at the same moment.
Paperwork, especially in Marbella, is so important said Sean following many issues with building licences. From sellers viewpoint speak with your Lawyer and find out any additional paperwork needed. The current time frame for Marbella Townhall to put papers together is 6 – 8 weeks. When you appoint a real estate agent, put the hard facts first and ask what is the price per square metre that they have sold in the last few months. It’s really important to have a property specialist who knows the local area.
Alex confirmed that we advise Clients to look at an area first, find a specialist agent in that area, see the area at different times and then look for property.
Challenges for 2022 and what’s in store?
Lack of stock is definitely becoming an issue said Keith and that covers quite a finite area. In previous years, when Clients reached their reach mid 70s / 80s they would think about selling. End of 2021 this has not been happening. Those Clients are no longer here, because they have no confidence to travel. This is one of main reasons Target are devoid of stock
Sean at Panorama is very positive. Panorama’s January figures had record sales, due in part to the continued reduced transfer tax in Andalucia. He advised that lack of stock a bit of an issue. However, there are new investors in the market building new properties and they still have plenty of inventory.
If you need help with your move to, or sale of your home on the Costa del Sol contact us at My Lawyer in Spain.
And if you are still not sure where to buy, also check our update on the Costa Blanca property market.
