THE Olive Press carried out a Q&A with Sam Shaje, the man behind the deals and CEO of Marbella Estate Group, about the state of the Marbella luxury property market in 2023.
Did house prices go up or down in 2022?
In 2022 house prices went up – we’re talking about a rise of about 6%. And almost everyone had record sales last year.
A lot of real estate agencies – including us – had their best year ever.
This year, 2023, started a little bit slowly but now it looks like the market is on the move again and moving faster. This is a slight shock as last year the market took off spontaneously..
What’s more, Spring is our busiest season, as everyone in Northern Europe realises how bad the weather is up there and they want to move down!
I don’t expect prices to go up this year by as much as 2022 – I think we will see an estimated increase of 2% over the year.
But it is going to be a difficult market for buyers with a budget under €1 million still expecting to find the criteria they’ve seen in properties in the last couple of years.
The market has made it to a spot where demand is a lot higher than supply, and this plays on the side of the vendors. They do not need to negotiate too much on prices – if at all – compared to the price drops for sale agreements we have seen over the past couple of years.
What is driving demand?
In spite of the economic problems the world is experiencing post-Covid with inflation and other factors, demand is still high.
But the wealthy, those who have the facilities to ride out the storm, are the ones who are driving the market in the Marbella area.
Also I believe that there is a fear with all the economic changes happening worldwide and many wealthy people prefer to keep their wealth in properties in a luxurious bubble such as Marbella instead of risking a big loss in the banks or stocks.
We have to keep in mind that properties are like gold, they will never lose value no matter what, the market fluxes going up and down, but pinned points such as Costa del Sol will always keep their value.
As always, the middle classes are the ones to feel it most. They may find they can not afford to buy a property and then have to suffer high priced rentals as well.
Is a particular type of property becoming more or less popular? If so, why?
In my eyes resale property is becoming more valuable and this has to do a lot with the most popular areas.
Companies doing renovations are more and more in demand with people preferring to buy well built older properties.
They prefer to have a solid structure that has lasted for years rather than the not-so-solid plaster-board walls of new properties.
I am not saying new builds are not in demand, but we have to keep in mind that the most popular locations only have so much land that is allowed to be developed.
Areas such as Nueva Andalucia, Sierra Blanca, parts of the Municipality of Benahavis such as El Pariaso La Quinta, Los Arqueros are now mature. This means that many buyers prefer to take over a property in these areas and renovate it to higher standards, rather than move further away just to have a new build property.
Or as a last resort, if they can find a plot, they can build their own. But in this case we’ve experienced many months of delays in paperwork in Marbella. This is not acceptable from our point of view as real estate brokers, knowing the vast income we bring to the Town Hall…
What challenges are people typically facing when buying or selling properties?
The Challenges today are that sellers who want to sell as high as possible need to realise that they may not get what they really want for their property. If they need to sell quickly they should take the offer that’s on the table.
The buyer’s challenge is that when they find the right property they should not be stubborn in an attempt to get the best deal! Try to close the deal ASAP as the market has almost nothing good left!
What nationalities are moving over to the area and have any increased or decreased significantly in 2022?
We still have a lot of Scandinavians, and we see a lot of British people. We also have a lot of French and Belgians here as well. So we could say that it is mainly central and particularly northern Europeans who are the ones bringing in the money for investments or holiday homes.
Even though we have to keep in mind that the Russian-Ukrainian war has affected the market, every day we see more Eastern Europeans investing in properties for holidays or just as a pure investment. They want to keep their wealth somewhere physical and not in the bank.
Despite what is said and heard, in my eyes many Eastern Europeans hold a lot of funds and I do believe they will come and start investing more in the next few years. I believe they were not really familiar with this area, which is becoming more famous by the day around the world.
We also have a growing portfolio of North Americans coming over to retire or simply work remotely.
The cost of living is a lot cheaper than California for example, and property prices are more affordable – you definitely can get more for your money! (Without expecting a Tsunami or hurricane to hit you – Joke).
Are there any new legal/tax/planning implications of buying or selling property either in development or on the horizon of being approved and implemented that people need to be aware of?
Not as far as I am aware. We keep on top of such matters for our clients. Searches are taking more and more time though, compared to the past two years. We always keep up to date with our friendly lawyers, who get us up to speed on any laws that we should be aware of.
Considering all of the above, how do you expect the property market to change and develop in 2023?
I thought there would be a lot more property on the market, keeping in mind everything that was sold last year. All those projects bought last year should be renovated and up-selling by now but they are not.
All I can say is that I am uncertain if this is due to the increment in prices of materials and manpower or just that they have not finished the works yet.
This could explain very easily the lower numbers of properties on the market to the benefit of owners who can hold out for high prices without fear of losses.
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