Marbella Property Market: Out with the Old, in with the New

According to various leading estate agents in Marbella, many buyers of seafront luxury villas and townhouses spend in excess of EUR 1m only to knock down the existing properties and build a new one. Out with the traditional Andalusia-style family home and in with the designer-chic villa boasting amenities and features to die for!

The recent change in legislation concerning seafront properties at the Costa del Sol has created a whole new surge of interest in traditionally built homes – but modern buyers want contemporary creature comforts such as surround sound, infinity swimming pools, air conditioning throughout, open-plan family kitchens, a gym and Jacuzzi and strangely, given the prevailing climate in Malaga province is sunny, they want floor to ceiling windows.

Seafront appeal

In Marbella’s Guadalmina Bay area, where most detached villas are situated within a short stroll of the sea, Amanda Fisher, director of Blue Ray Design & Build, is fondly regarding her most recent project, an enormous six-bed property that now boasts all the modern design features wealthy buyers are looking for. The home has just come on the market for EUR 3.9m.

Beachfront villas constructed 50 years ago are typically owned by Spanish families – with the recession biting hard, many owners are forced to part with these heirlooms. Amanda Fisher’s clients are on the lookout for such properties – which they purchase with the “bulldoze and rebuild” option in mind. Updated legislation has made life a lot easier for everyone in the real estate business.

“Previously, it could take 18 months to get a building licence,” Amanda explained. “Now, Marbella is one of the town halls that has cut bureaucracy, so you’re looking at 6 months. If you stray into neighbouring Benahavis – which includes the gated La Zagaleta estate, where villas can cost EUR 20m – then it’s even faster,” Ms Fisher added.

The recently introduced Golden Visa, which automatically grants residency to buyers investing more than EUR 600,000 in Spanish residential real estate, has made a huge difference to some of Marbella’s emerging markets, too. Wealthy buyers from China, the Middle East and Russia are beginning to snap up some of Marbella’s finest beachfront properties, only to knock them down and build to their own dream-house design, even if they are unlikely to ever spend much time in their homes.

Malaga Airport has already recorded a 30% increase in private jet traffic in the last 12 months, with wealthy Middle Eastern potentates, Russian multi-millionaires and European celebrities from the world of sport and entertainment jetting in to claim their stake at Marbella’s shores.

From old hat to new opportunity

The lower end of the market is also seeing a return to better times. Previously stricken developments like the Aloha Hill Club project in the hills of Nueva Andalucía are now in demand. The original developers went bust and the development was repossessed, passing into bank ownership.

Scandinavian  investors bought the development and are now selling the flats at starting prices of EUR 225,000. This may only be 50% of what such flats would have fetched at the peak of the housing boom in 2007, but it is a start, given that there are still plenty of unsold homes haunting the middle to lower end of the property market.

“You have to work hard now to sell inland, and you need to offer added value, with services such as a concierge, spa and crèche,” explains Sarah Shrewsbury, development manager for the Aloha project.
 
A surge of foreign demand has meant everybody’s had a “manic summer”, Sarah said. “August is usually when agents shut up shop, but this year they’ve been reporting record sales.”

Confidence in Spain as a safe investment market seems to be returning and demand appears to be gradually rising, even if prices in September still saw another monthly slump of an average of 9.4%, according to news provider Dario Sur.

Michael Lovett, estate agents’ Fine & Country’s senior partner, believes property buyers see Spain as a safe heaven with regard to investments. “Buying in an established coastal area such as Marbella ensures a healthy investment,” he said in a recent interview with property portal kyero.com.