Marbella Real Estate market report Q1-Q2 2013

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Marbella Real Estate market report Q1-Q2 2013

  1. 1. MARBELLA REAL ESTATE MARKET Q1 & Q2 2013 Stephen Lahiri Director Lucas Fox Marbella www.lucasfox.comMARBELLA REAL ESTATE MARKET Q1 & Q2 2013 MARBELLA REAL ESTATE MARKET: OVERVIEW • In early 2013, Lucas Fox established an office in Marbella in order to provide quality service and the best luxury properties to our international clients • Average property prices have held steady in Marbella and Estepona. Super luxury properties in prime locations still demand and achieve unique prices solid demand for exclusive penthouses and apartments in frontline locations, particularly in Marbella and near the more urbanized locations closest to the nightlife, boutiques, and the beach clubs, such as Nikki Beach and Ocean Beach. MARBELLA PROPERTY SALES TRANSACTIONS Sales transactions and visitor numbers increased in 2011 and 2012 and this has continued during the first half of 2013. Marbella properties saw a larger than usual end-of-year trading in 2012 and a faster upswing in the first few months of this year. Across Spain, statistics for property transfers and sales transactions tend to spike in December and January as properties change hands at the end of the tax year, with some transactions still showing up in January data. This is again observable at the start of 2013, but interestingly, the muted winter and spring months with low transactions has not been repeated. Instead property transactions are quickly returning to the level of trading usually observed in the summer months. Generally sales have been strongest for luxury properties and in prime locations. • Lucas Fox Marbella has seen increasing interest from Arab, Chinese and Indian investors for luxury properties in prime locations • The new Residency Law which will enable non-EU investors to obtain residency when they invest €500.000 or more in property is already attracting a great deal of interest from international buyers MARBELLA REAL ESTATE MARKET: SUMMARY Marbella is one of the most popular and competitive property markets in Spain. It is driven by a great year-round climate, a buoyant rental market and an international and sophisticated lifestyle. Often referred to as the “California” of Europe, it boasts an excellent restaurant and social scene, a vibrant beach culture as well as access to more than 100 golf courses and the ski resorts of the Sierra Nevada In the exclusive residential areas of Marbella, Benahavis and Estepona, there has continued to be demand for luxury villas, particularly contemporary and modern, which include swimming pools, outstanding views and high levels of privacy and security. We are also seeing We believe that all the signs suggest that the market is starting to bottom out and predict that there will be an increase in the number of property sales transactions on last year, particularly at the top end of the market.
  2. 2. www.lucasfox.comMARBELLA REAL ESTATE MARKET Q1 & Q2 2013 Average Sales Prices for Costa Brava properties (selected areas): Q3 2010 – Q2 2013 Source: idealista.com € per Square Meter Since the start of the economic downturn and increasingly in the past couple of years, buyers have demonstrated greater caution when committing to property purchases in Spain. The same applies in Malaga, where buyers view a greater number of properties than in previous times before reaching a decision. They also tend to be more patient at biding their time for the best located properties to emerge, particularly in the areas of Los Monteros, Golden Mile, Sierra Blanca, Puerto Banus, Nueva Andalucia, Benahavis, La Zagaleta, El Madronal, La Heridia, Estepona, Sotogrande and Los Flamingos. Even in these areas, value has become a more important factor with buyers keen to ensure that they can absorb any future depreciation in property values. MARBELLA AVERAGE SALES PRICES Average property prices tend to obscure a true picture of trading amongst luxury properties in Marbella and districts. High-end properties with substantial lifestyle assets are more resistant to price fluctuations in the broader market, but at the same time, there are some excellent discounted property opportunities beginning to emerge. Generally prices are much more negotiable further back from the coastline. According to Spanish web property portal, Idealista, prices in Marbella and Estepona held steady in the first six months of 2013 ending the half year on €2,122 and €1,456 per square metre, respectively. Super luxury properties in prime locations still demand and achieve unique prices. “Buyers are getting more excited as they sense we are now nearing the bottom of the market,” comments Stephen Lahiri, Director of Lucas Fox’s new Marbella office.”Exclusive properties in the most desirable locations are attracting more international buyers looking to take advantage of the current economic climate. In particular, buyers from Northern Europe, Scandinavia and Russia are tending to invest as a lifestyle decision. Given the levels of interest, we know that investors from the Middle East, China and India are ready to purchase for the investment potential when the new residency law is enacted. Most of these buyers are taking a long-term outlook. They are looking for high quality properties in good locations that can provide long-term capital appreciation and a rental income in order to cover the running costs whilst the property market remains stagnant.” MARBELLA RENTAL MARKET Average rental prices for Marbella ended the first half of 2013-07-26 on €7.38 per square metre, while average rentals around Estepona remained steady at €5.72 per square metre, according to web portal Fotocasa. SHORT-TERM RENTAL DEMAND Airport arrivals into Malaga-Costa del Sol airport are a good indicator of demand for short-term rental accommodation in Marbella. This indicator helps investors determine the potential yield that can be generated from purchasing Marbella apartments primarily for use as tourist accommodation. To the end of June 2013, the Malaga- Costa del Sol airport has welcomed 5.72 million passengers, a growth of 0.5% above 2012 arrivals and defying the national trend which saw a national drop of 5.9% in airplane travel. To end of June 2013, the wider Andalucia region – which includes Marbella and surrounds – hosted 3.4 million international tourists, accounting for 13.1% of all international visitors to Spain this year. Scandinavian, British and Dutch tourists are the predominant visitors. FOREIGN INVESTMENT INTEREST As the Lucas Fox office in Marbella opened in May 2013, we do not yet have data on international visitors looking at Marbella property on our website. However, Google trends since the start of 2012 show steady and continued interest in Marbella property from global searches. While there is some drop in searches in the Average Sales Prices for properties in Marbella and surrounding luxury districts (Benhavis and Estepona): Q1 2011 – Q2 2013 / Source: idealista,com and fotocasa.es
  3. 3. ABOUT THE LUCAS FOX MARKET REPORTS You can keep receiving up-to-date market reports from the Lucas Fox International Properties team. Subscribe to future updates at our website or bookmark our blog for the latest news on the Marbella real estate market. Alexander Vaughan Founding Partner Stephen Lahiri Director Lucas Fox Marbella For more information contact us: E info@lucasfox.com / T (+34) 933 562 989 www.lucasfox.com final quarter of the year as the summer months fade, the start of each year sees a quick upsurge in interest as travellers and investors begin planning visits for the year ahead. While the majority of international searches for Marbella property have been amongst UK residents, we know from our work with interested buyers that there is also strong interest in high- end Marbella properties from; Northern European, Russian, French and Malaga-Costa del Sol Airport Arrivals (‘000s): 2011 – 2013 / Source: Aena.es Global trends in searches for Marbella property, 2011 – June 2013 Source: Google Trends Scandinavian buyers, and more recently Arab, Chinese and Indian investors. Lucas Fox Analysis and Predictions for 2013 “As in most of Spain in general, property prices in Marbella have reduced significantly over the last 4 years. This year has seen more buyers interested in properties at their sales price, indicating that vendors are being realistic and that buyers are more confident that the market has bottomed out,” comments Mr Lahiri, Director of Sales at Lucas Fox Marbella. “We believe that all the signs suggest that the market is starting to bottom out and predict that there will be an increase in the number of property sales transactions on last year, particularly at the top end of the market.” “We expect the majority of interest to come from lifestyle buyers from Scandinavia, Russia and Northern Europe and investors from non-European countries currently waiting for the new residency laws for non-EU citizens to take effect. The key markets for these types of clients may come from Russia, China, India and Southeast Asia,” Mr Lahiri adds. “We are currently registering as many as 20 interested clients a day through our Residency in Spain joint venture with Spanish law firm ECIJA” comments Lucas Fox co-founder Alexander Vaughan “We expect there to be a huge spike in demand from non European buyers when the law is passed in October” “As a result, in order to meet the needs of expected buyers from these new markets in China, India and around the world, Lucas Fox is working together with investors and local developers to produce new off-plan properties that will particularly appeal to buyers from these international locations. Our new Lucas Fox Property Lounges that have been a success in Barcelona will be rolled out to Marbella before the end of 2013,” adds Mr Vaughan. “We are also working on new media-related projects that will ensure that we stay ahead of our competitors, and continue to offer a complete property service for both international buyers and local property owners”

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