If you have a Million Euro to spare head to the Costa del Sol

The average Spanish home may not find a buyer no matter how heavily discounted it is, but the luxury homes market at the Costa del Sol is doing very well, thank you very much! Prime properties with a price tag of one million euros or more sell fairly easily these days, according to Fernando Encinar, the head of research at property portal Idealista.com.

The medium-range market suffers from a lack of available finance, lack of domestic buyers and an oversupply of homes that were built in a style no longer pleasing to today’s discerning buyer.

According to Mr Encinar, the luxury market consists of two distinct areas: properties located at the coast and properties in desirable inland locations such as the Spanish capital Madrid.

The Costa del Sol in general and Marbella in particular are favoured by Scandinavian, Chinese and Russian buyers, but the growing political unrest in the Middle East has also prompted buyers from Morocco to invest in the prime property market at the Costa del Sol.

Inland luxury homes attract buyers from the world of commerce, with well-to-do domestic buyers looking for a discreet and smart residence with good access, plenty of privacy, a ready-to-move-into home that doesn’t need any alterations. Unlike their Costa del Sol counterparts, they are not interested in the open display of wealth or the glamour and razzmatazz of the coastal resorts.

In a buyers’ market it is natural that even the wealthy home buyer will expect discounts. In the prime market, so Mr Encinar, discounts of up to 50% are not unheard of. Wealthy people are quite hard-nosed about negotiations and typically point sellers to the fact that their prime villa with guest house, staff accommodation and swimming pool attracts high running costs, which need to be factored into a “realistic” asking price.

Spain’s prime property market reflects what has been happening elsewhere in the world. In Britain and Florida for example, cash-rich buyers snap up amazing bargains in the high-end market.
While Spain’s bottom-end market is also seeing a slow recovery thanks to incredibly high discounts, the middle of the market is struggling. Domestic demand is low because of frozen wages, high unemployment and lack of mortgage finance.
 
In contrast, buyers with less than EUR 1.5 million cash to spend can find a sea-view villa in the east of Marbella for just EUR 1,295,000. Boasting 4 bedrooms, 4 bathrooms, a 1,386 square metre plot, heated swimming pool, in- and outdoor Jacuzzis and cinema room, the villa lies in a secluded spot within a short drive of Marbella’s wonderful amenities. The asking price has already been reduced from EUR 1,550,000, but an experienced cash-buyer is bound to haggle over price, even if the villa boasts sea views from virtually every room and has a pool table.

In the middle-range market there are amazing bargains to be had, but if a buyer doesn’t have EUR 500,000 in cash and needs part-finance, then they’d better not turn to Spanish banks for the difference. Properties with 2 to 4 bedrooms, situated in a newly built development in an exclusive residential complex in Benahavis, which is just a short drive from prestigious Puerto Banus and Marbella, can cost as little as EUR 450,000.

Located in an Andalucía-style white village perched on the edge of the Sierra de las Nieves, the gated community boasts villas, penthouses and large modern apartments set in beautiful landscaped gardens overlooking a golf course and lakes. Owners have even access to an exclusive Club House.

For buyers with more than EUR 600,000 cash to spare, the prospects rise considerably. Marbella’s famous Golden Mile is one of the most sought-after addresses in Europe. Luxury apartments in this part of Marbella usually cost more than EUR 2 million, but now there is considerable choice within a EUR 620,000 to EUR 1,950,000 price bracket.