22 Jul, 2016 @ 09:29
9 mins read

Brexit property blues in Spain: Short term pain, long term gain

property observatory
PROPERTY OBSERVATORY: Alex, Taylor, Scott, OP editor Jon Clarke, Mark and Campbell

THE EU referendum was always going to have an impact on the property market in the British buyers favourite of Southern Spain.

PROPERTY OBSERVATORY: Alex, Taylor, Scott, OP editor Jon Clarke, Mark and Campbell
PROPERTY OBSERVATORY: Alex, Taylor, Scott, OP editor Jon Clarke, Mark and Campbell

But after months of divisive campaigning, the nation voted for Brexit, sending shockwaves around the world and throwing up many questions, most of them still unanswerable.

But of all the talk of doom and gloom and ‘the end of the world’ narratives, what has really happened to the property market in the short term?

The Olive Press sat down with a panel of seven local property experts, from currency analysts to surveyors and developers to lawyers to ask what they have seen so far… and, perhaps more importantly, where they see the market going this summer and towards 2017.

This month’s roundtable discussion, hosted by Real Capital Solutions-SPP, in Centro Plaza, included SPP boss Taylor Cox (TC), alongside: Mark Rickard (MR) from Smart Currency Exchange, Alex Radford (AR) from My Lawyer in Spain, Campbell Ferguson (CF) from Survey Spain and estate agents Scott Marshall (SM) from PropertieSpain, in Benahavis, Jerry Kyrk (JK) from Fastighetsbyran, in Marbella, and Adam Neale (AN) from Terra Meridiana, in Estepona.


  • High end market least affected
  • Market loses around 20% of British buyers
  • Optimism however over a bounce back
  • British sellers more likely to negotiate

SM: I lost two sales the day after Brexit on June 24 and have had several cancelled appointments. Many people are just waiting for the market to stabilise, they say ‘we like it and we want it but we will wait’ until it all calms down. Luckily, we have diversified rapidly to market to other nationalities and have luckily had more interest from Belgium and other European clients and things are still attractive here because the prices are still low.

CF: We had three surveys cancelled the day after Brexit, which says it all, but we have had a lot more people asking what the actual real value of properties are, in order to get them sold.

AN: It has made a few clients pause for sure, but we envisage them coming back once the exchange rate starts to improve for the pound. It has created uncertainty and dropped the exchange rate making it more expensive for UK buyers, at least in the short term

TC: Obviously uncertainty is never good for the market, we lost 20% of our British buyers, which is not great but it’s not catastrophic. The realities will not be known for more than two years, the real interim game is the currencies, with around 50% of our British buyers now waiting for Sterling to stabilise before they jump in. But I would say the drop in the pound is more a problem for the sub €200,000 market. I would be more nervous for these sales because the buyers are on tighter budgets and could feel the difference. People with money who are buying in places like Marbella, they don’t like to wait around. But if you’re British, where else are you going to go? It is still Southern Spain. The sun is still out. Turkey and Egypt are too dangerous, Florida is too far away and the dollar too strong, Spain is still the best place for a holiday home. Some pessimistic people will remain nervous but I think things will stabilise and return to normal.

MR: If there’s a Spanish bank mortgage involved in the purchase it means the buyer’s exposure is minimalised so they just have to wait until sterling stabilises, but regardless, those wealthier buyers with spare cash will push on because they want their property now and have probably set their sights on it a long time ago, they don’t like to wait or to put their lives on hold.

JK: I noticed in the run up to the vote that the Scandinavians were definitely more reluctant to buy and nervous about the result, but ever since it has been fantastic and they have jumped back in. I think they were simply more concerned about the vote itself than the actual result and our sales at Fastighetsbyran have actually been better in July than in May and June combined. I guess they realised that the world has not ended and have carried on with business as usual.

MR: On top of that, people can also negotiate more and get a discount, if they get less for their pound. It is also possible to do the purchase in Sterling if the sellers are British, although some notaries are not keen on it, due to the tax complications, so don’t count on that always being possible.

AR: That said, my legal firm is seeing more and more people doing a large chunk in pounds, say 20% in euros and 80% in Sterling. Yes, sure some notaries don’t like it, but some are happy with it, so you just have to find the right notary. Those who are on hold now are just waiting for the exchange rate to stabilise, perhaps after the summer.

AN: My advice to UK residents living permanently in Spain is to stay calm and see what happens. Both Europe and the UK need each other, Germany runs a trade surplus with the UK, the UK is the third most important export market for Germany after the US and France; in contrast the UK is the ninth most important country for imports to Germany. Both sides have very good reasons to negotiate an amicable divorce settlement.


TC: I don’t see prices decreasing in what we’re doing, because we are dealing in quality assets, and there aren’t many quality assets today, the supply/demand ratio is still very much in our favour regardless of the Brexit, people still want mid-market or above quality.

AN: They are definitely going to continue going up

CF: I don’t agree. I think they will actually go down, particularly where British sellers are concerned. I also think the British will be more willing to negotiate. In the prime locations however, I expect them to stay the same or go up a little. It is more in the lower end of the market where prices will be affected more.

MR: The Spanish are also coming back to the coast again, from the key cities of Granada and Cordoba, and they are a much bigger market than the Brits, so we are most likely to see further price increases.

SM: On top of this, it is so hard to get licences to build, so it is becoming increasingly difficult to achieve all three criteria – Location, quality and price. To get all three nowadays is pretty difficult, last year or the year before no problem, but this year it’s much harder, so that makes sure prices stay up and continue to rise.


  • Fears of a PP government
  • Jitters in Sotogrande
  • Increase in interest on the Rock

CF: People are jittery in Sotogrande because if the PP get into power they are going to be far more likely to push for joint sovereignty of Gibraltar and make things very difficult. The old Franco-faction of the party has a fixation on Gibraltar and see Brexit as their golden opportunity.

While they are nervous about buying in Spain and working in Gib, more people are looking on the Rock because they do not know if they will be able to get to and from Spain each day.

SM: I agree that the government could make things very difficult at the border, especially if PP gets into power again. Margallo has made it clear what his intentions are.

JK: Gibraltar is very important to Spain’s economy, particularly on the Costa del Sol. They do spend money here, from Sotogrande to Marbella, in particular, so I think to undermine that would be a bad move, but the PP do have an obsession with Gibraltar, so I can see them pushing for joint sovereignty or making things more difficult.

AR: I agree. I am sure they will keep the border open, Spain relies a lot on Gibraltarians spending their money here. I think the UK will spend six months debating what relationship we are going to have with Europe and I think we can negotiate for many of the same terms we had before.

MR: But let’s remember Spain does what it wants, whatever logic there is, whatever Brussels insists, if they want to close the border they will close it.


  • Polish and Chinese new arrivals
  • Arabs returning
  • More South American investment

MR: The Polish are buying a lot more at the moment, and I have heard quite a few Southern Americans are coming too, particularly from Argentina.

CF: Yes there has definitely been an increase in Polish buyers, it is a growing economy and there are many Polish who have made money in the UK and Ireland and they are now investing what they have earned into a holiday home in Spain.

AR: We actually had a Polish sale today. Cultured buyers who actually bought a place in Granada city after earning their money elsewhere, so yes definitely a growing market.

TC: Development-wise there is an increase in South American interest too, there are now three big Chilean funds buying up land and properties.

JK: In addition, the Scandinavian market is continuing to grow and this month has been crazy, but I have also seen an increase in Chinese buyers and due to an improvement in oil prices a lot more Arabs are coming back.

SM: In terms of small buyers the Americans are coming and lots of Canadians too, in fact two of the biggest funds out here right now are American.

AR: Yes lots of Canadians, it’s such an international market here and that seems to be becoming even more so now.


  • Rent likely to increase
  • Can add value to property

CF: It will affect the low level market a lot more because they look to rent out their properties on the cheap, so they are losing out on the extra costs.

AR: We have had quite a lot of registrations since the new rental laws actually, and it is not too expensive, it’s reasonable, and it’s more straight forward now as there are no grey areas, you just have to pay your tax, end of story.

CF: Additionally, if the property complies with the laws it will actually earn more in rentals than those that don’t, because you have a stamp of approval and it increases the confidence of your clients.

JK: Rent prices will go up for sure, it is what happened in Barcelona and Madrid and for sure it will happen here, but that will lead to more people wanting to buy so I guess it’s good for us.


  • Axarquia still up and coming
  • Quality properties in demand
  • New shopping centre in Torremolinos a potential ‘game changer’

TC: Estepona to Mijas is still the key area to buy, although I personally love Sotogrande because I think it is so well laid out, but I do think the impact of Brexit may be felt there for a while because of how close it is to Gibraltar. I think going East is the logical way to go, and all the way to La Herradura, which is a great spot.

SM: Estepona is doing very well right now as are Nerja and the Axarquia region. What is important is that you are not more than 50 minutes away from a good airport, otherwise you might have trouble selling.

AR: That rules La Herradura out, but Nerja is definitely fine. I also think Benalmadena will continue to grow. I know someone building 700 homes there at the moment, and soon there will be the new massive shopping centre in Torremolinos, which will be huge.

TC: That new centre is going to be incredible, it could change the game out there for sure, Benalmadena and Torremolinos markets will benefit a lot from that.

AR: I also know someone who is thinking about building 2,000 properties in Nerja, but I think Torrox and Rincon de la Victoria are going to see the best growth in that area because they have less restrictive planning laws and are nearer Malaga.


  • Manilva shaky, while Banus is also losing its edge
  • Benahavis more international
  • British dominance fading

TC: There are funds increasingly buying up land and renovating developments in Manilva and around that way, which can be a fun game to be in, as long as you’re the cheapest product, because as soon as a big half built site next door is liquidated by Banco Popular, whoever, and another fund gets in there and undercuts you you’re dead in the water.

CF: I heard that the top level are not coming into this area as much because places like Banus are just so terrible as an environment, they need to clean it out. The high quality shops like Gucci etc are also having second thoughts because they are finding that people are just not coming to them as much, they’re wondering if Banus has lost its spark.

JK: I think Banus is still a magnet, it still brings people and I think we slowly see that as new restaurants and new places are opening, but of course the second row is more sleazy as it always has been. Maybe there should be an effort to clean it up a little.

CF: I have seen changes in the makeup of Benahavis, it used to just be Brits, but now we are seeing Belgian, German, Dutch, mainly it used to be British but it’s changing.

AR: In general the market here has become increasingly international, I know Mark’s currency clients here were from 25 different nationalities, whereas ten years ago it was like 80% Brits, but now that’s all changing, this is an international market, the Scandinavians love coming down here, the Germans, Belgians, Arabs etc, the Brits no longer have such a big hold on the market. They are big, but after Brexit, slightly less so.

Jon Clarke (Publisher & Editor)

Jon Clarke is a Londoner who worked at the Daily Mail and Mail on Sunday as an investigative journalist before moving permanently to Spain in 2003 where he helped set up the Olive Press. He is the author of three books; Costa Killer, Dining Secrets of Andalucia and My Search for Madeleine.

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