Marbella property market proves resilient

It couldn’t be helped, with large parts of the world, including the Costa del Sol, in lockdown in response to the Covid-19 situation, business was down for the simple reason that movement and travel were impaired. Sectors such as retail and hostelry were particularly hard-hit, as were airlines and certain types of manufacturing, but property agents, both in Marbella and across the world, proved very adaptable in using modern communication technologies to continue to offer virtual property tours and enable prospective buyers to view and select homes of interest to them.

Ever since overcoming the worst of the crisis, Spain has been lifting lockdown since May in a staged roll-back of the restrictions first imposed in mid-March. It has been heartening to see the Costa del Sol come to life again, with restaurants, shops, cafés and offices followed by beaches, sports facilities, hotels and eventually air travel as well. Real estate companies had expected a very slow and gradual revival of the Marbella property market, but in reality the response has been much stronger, with pent-up demand adding momentum.

Strong comeback
The result is that, in general May enquiries were recorded at around 2% below the same month last year, a remarkable feat if you consider we were all in lockdown up to the end of April. The Coronavirus impact will certainly be seen in the 2020 figures, if only because business was forced to all but grind to a halt for the better part of six weeks, but it has bounced back strongly both in sales and rentals demand, and overall experts in the Marbella property market are expecting an overall drop of around 20% for 2020, with prices coming down by around 10%.

The most sought-after locations, such as Marbella’s Golden Mile and Nueva Andalucía, are not likely to suffer any drops in price, as demand is so strong here in relation to limited supply, but overall prices could decrease by around 10%, with up to 20% in more outlying areas, and this in itself is a factor that will help to keep interest keen, among investors as well as end-user buyers. The situation bears no resemblance to the financial crisis, with no overheated property market and no financial/economic crash.

Instead, growth has been sustainable over the past few years and able to weather storms such as Brexit and now the Covid-19 crisis. This means that we are seeing few distressed sellers, no panic and the construction sector continues to work in Marbella, albeit on a somewhat smaller scale.

Foreign buyers still dominate the property market here, and as tourism is expected to make a strong comeback in 2021, this will give add further dynamism down the road. For now, many agents report being rushed off their feet with incoming enquiries and viewings, a sign that demand remains healthy, and with the asking prices of any overvalued properties (roughly one in three) coming down, rather than there being a systemic drop in property prices, these could be interesting times for buyers and sellers alike.

For personal information about Marbella’s properties and real estate market, contact the experienced team at Nordica. Our experience is at your disposal.