5 Oct, 2012 @ 21:00
5 mins read

Respected estate agent defends Marbella’s resort property sector against sceptic

christopher clover

SOM: Dear Chris, I have recently seen properties on the market in Marbella which agents claim were previously on at €3m, and are now reduced to less than €1m. This doesn’t give confidence to perspective buyers in terms of what is a good offer.

Chris: Dear Som, we have been in the property market here for more than 40 years and I have never seen a property reduced by so much money. I have seen the odd one where the owner was asking a ridiculous price in 2007, and getting no views, now down by half or a little more; but reducing it by two thirds with room to negotiate? We don’t have any and we haven’t seen any.

Furthermore, if you really did see this sort of claim you should look carefully at the agent who might be making it. And also, it makes no difference at all what the previous asking price was. What counts is the current asking price compared with similar properties recently sold.

Som: Yes Chris that is indeed the best thing a buyer can do… but trust me, owners don’t like it. It took a lot of effort to find out the sale price of a similar property that I was recently interested in but when I made an offer based on my findings the owners flatly rejected it, adding: “We won’t sell below this price”. What planet are the sellers living on?

Chris: Well, actually what they are doing is sending a clear message to you that Marbella is a quality market. And we are finding that when a property is sold in a certain urbanisation at an amazingly good price (for the buyer), it is often not replaced by a similarly low-priced property.

In broad terms, this means:

1. There is not a big supply of quality properties in quality areas.

2. There is a large demand for quality properties in quality areas. You must remember that Marbella is a ‘multi-source market’, with local, regional, national and especially international buyers. Marbella is in a totally different bracket to the 900,000 or so new, unsold apartments spread out across Spain, with an average price of €100,000, and exclusively for a local market.

3. There is a difference between sellers of the more expensive properties in the more consolidated residential areas, compared with sellers in non-consolidated areas. Those who bought in great areas, paid more and many of them are still well-off, with no real financial need to sell. Sellers in the lower price ranges are more desperate and a buyer will find the best deals in the lower priced properties. Indeed, I believe the market under €500,000 will still go down further in the next year, as you have suggested, with the exception of those properties in the very best residential areas, but there is strong activity in this price range anyway, as sales prices often already anticipate a further discount.

Som: I think anyone who believes Marbella real estate will increase in value is grossly mistaken. There is an excellent report published by the Greek central bank on Spanish real estate insisting there is no chance of prices going up. Actually I would recommend looking at Greek property prices, how they have evolved in the last four to five years. The same thing is happening to Spain, albeit a year or so later.

Chris: Sorry Som but you should not be comparing Marbella to Greece, but with high quality, wealthy residential areas of other parts of the world! Properties in first class, consolidated residential areas that are very well-bought today, will, in my opinion, and in light of history, certainly appreciate in time. As you yourself noted, there is a strong resistance to dropping prices to distress levels in these residential areas and there are very solid reasons for this, simply those of supply and demand.

But you are ignoring perhaps the most important factor involved in purchasing properties in Marbella today: that of the investment in one’s lifestyle, and that of the family, in an area which enjoys a way of life unique in Europe. There is a pent-up demand for people who have been waiting for prices to drop for the last four or five years, and prices are today at an incredible level of around 12 years ago, except for the more expensive properties.

The buyers who have waited for years to buy have watched time go by. They are watching their children grow up, and the opportunity to enjoy the special lifestyle that Marbella offers is quickly dissipating, and people do not get younger with the passing of years.

Those buying today feel that the timing is right, that they have waited long enough, and want the very best deal they can achieve, but are less concerned if they pay 5% more or less. These buyers just want to get on with their lives and enjoy the fruits of their hard-earned cash.

Properties in first class, residential areas will always appreciate in time

Quite simply, the interest we have had for properties priced €500,000 and above has surged this year, despite the crisis. And where no more than 40 properties over €3m were sold between mid-2010 and mid-2011, there have been at least 80 properties in this price range sold so far this year alone!

Som, I believe that you could probably find what you might be looking for up towards Alicante or Valencia. There are very few bank repossessed properties in Marbella, except at the bottom of the market, in less desirable residential areas. And no resale property (which comprises 97% of the market here) offers 100% financing, unless it is with the cheapest bank-repossessed sector.

The market must be allowed to speak for itself, and you have to be a keen observer. People analyse their risks in different manners. If it is a pure investment only that you are looking for, without personal use, for rental return and with good financing also (provided you can prove your ability to finance it without rental income, which is the only type of loan being given) you would be better off looking at property in big cities.

I have studied this market for my entire life. It is true, what you say, that the mentality of sellers is often in denial of real sales value. It is a well-known fact that sellers in Marbella are often unrealistic and overprice their properties. But we have seen asking prices drop year after year until: bingo! the asking price starts generating viewings of the property since it has become perceived by the market as ‘worthwhile seeing’.

And if these viewings become more frequent they create a market where owners will eventually receive offers that they can freely take, negotiate or wait for a better one.

More and more sellers are becoming aware that their properties are not really worth what they thought they were, and, consequently, doing what is necessary to adjust their prices to encourage viewings.

But I’ll make this clear: no seller achieves a sale today unless he is open to negotiate.

We are receiving perhaps 10 to 15 price reductions from sellers every single week.

Asking prices have become much more realistic. Sellers are not so much in denial as in the past, and those still in denial will come around in time if they want to sell.

There are certainly plenty of ‘deals’ out there and the only problem is that there are scores of people, including many local residents looking for them.

So what is it about Marbella that keeps demand high while the rest of Spain suffers?

It is the quality of the environment, the excellent facilities and of course the 12 month season that Marbella and only Marbella affords.

Thankfully there is a very active market in Marbella today, quite unlike the period between 2008 and 2010.

Yes, negotiation is more difficult than before.

But fortunately this is one of my agency’s strengths.

It is the aggressive seller who is winning and achieving his objectives mostly with the help of a good agency.

But aggressive does not mean accepting an offer of half of what may be an already severely reduced asking price!

The full debate is available at  http://www.panorama.es/blog/1122-insights-marbella-real-estate-market-august-2012.html



  1. Chris Clover is correct in his analysis of property prices and what effects that in location/supply/demand and time. If a buyer wants a good/secure INVESTMENT, it’s fairly costly even today around Marbella. You always GET what you paid for.

  2. Quote from CC “we have been in the property market here for more than 40 years and I have never seen a property reduced by so much money”


  3. Well spotted Marcus, more smoke and mirrors I’m afraid. If he’s been in the business that long he would also know the enormous discounts that have been offered in exclusive areas including La Zagaleta as well as other CDS top spots.

    Ater adding in 11% transaction costs to buy and maybe another 7-8% or more to sell one day prospective buyers should still be made aware that whatever property they buy still needs to rise 20% just to break even let alone make a profit. Worse still for the British who still get a 25% poorer exchange rate than during the boom years.

    Take everything that agents tell you with a large handful of salt, their commissions depend on their spiel. I’ve yet to meet an agent in Spain who will tell you what you want to know, but he will tell you what he wants you to hear.

  4. So on his own website there is/was a property reduced from 3m to 1m and yet he says above that he has never seen such drastic reductions. Estate agents and lawyers – just because they pretend to believe the lies they tell still doesn’t make them the truth instead.

  5. We have to bear in mind that article in question was published in 2012, not last month! I stand by my statement at the time and I stand by the integrity of my company, as do all those in the testimonial section of our website at “www.panorama.es”, and the thousands of buyers and sellers who have dealt with our company over the years. The property referred to had its price dropped very recently from €1.3m to €1m and now raised to €1.1m. It has been on the market since 2001, originally significantly overpriced at €3 million. At the time the owner was only willing to sell at a higher-than-market price, and after discussing it with our team, he was aware it was unlikely to sell at or close to his asking price. Notwithstanding, the price gradually dropped over 14 years to a point where the current asking price is generating serious interest (in a more deteriorated property) and it will no doubt sell very soon because the seller now really wants to move on. Taking again into account my previous “bird’s eye” comment: it really makes no difference what a previous asking price was for a property. What is important is a property’s current asking price compared with similar properties recently sold.

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