Adam Neale (Columnist)
THE top of the real-estate market in the Golden Triangle of Marbella, Estepona and Benahavís is booming, driven by high demand, limited supply and long lead times for building permits and developments.
We’ve already written about the buying frenzy underway in La Zagaleta, where sales worth well over €100 million have been reported in the last six months alone. But La Zagaleta is far from the only place on the Costa del Sol where high-end homes are selling fast.
Here at Terra Meridiana, we’ve already sold a number of multi-million-euro properties in some of the most exclusive areas of Marbella in 2021, inclduing Cáscada de Camoján, La Zagaleta, Sierra Blanca and the beach front. And interest among affluent clients for the very best properties in the Golden Triangle of Marbella, Estepona and Benahavís shows no sign of abating.
Why is market demand so strong?
Right now, the top of the market is experiencing higher levels of demand than it has for years. There are good reasons for this:
1. The COVID-19 pandemic has seen property searches worldwide drop in big cities and rise in ‘safe’ areas, like the Costa del Sol.
2. More and more people are working remotely, letting them choose where to live based on quality of life not proximity to an office.
3. More affluent clients who have savings and liquid assets are looking for a better return on investment than the interest offered by banks.
Why is stock in short supply?
There’s simply not enough stock on the market to satisfy demand for high-end properties. Again, there are various reasons why:
1. The volume of recent sales has reduced the total number of existing properties available for sale on the Costa del Sol.
2. New listings are not coming to market at a fast enough rate to replace those already sold, leading to a further squeeze.
3. Planning delays in places like Marbella have exacerbated the lack of product, as land-to-build lead times can reach over three years.
What about new developments?
There are two kinds of new-build properties, homes sold by a developer and a home you build and develop yourself. Both are in short supply for different reasons:
1. Spain is still recovering from the slump in new development that took place during and in the aftermath of the financial global crisis. New developments are under construction, but many are still at the planning stage. And, because financing remains tight, some may never get off the ground
2. The Marbella area, in particular, can have lengthy delays to obtain a building permit. Town-planning issues affect both commercial developers and private individuals who apply for building licences. This can add up to long lead times to get a project off the ground.
3. The scarcity of stock on the Costa del Sol also applies to building plots. Finding land to buy can be a competitive and expensive endeavour in the current market.
Why now’s a good time to buy
The current level of demand for high-quality homes on sale for more than a million euros looks set to continue and possibly grow. If you’re considering buying a home or investing in the property market on the Costa del Sol, our advice is the sooner you buy the better.
Prices are already rising for the most expensive real estate, as potential buyers are willing to pay a premium to secure the property they want. If you are in a position to purchase a property with your own funds, the rate of return on your investment will almost certainly beat the banks.
And a good time to sell
If you own a premium property on the Costa del Sol and are thinking about selling, now is also a great time. We are receiving lots of enquiries every day for the very best properties in prime locations such as Marbella, Estepona and Benahavís.
