Will Marbella Property Market soar now that Spanish Recession is finally over?

According to the Bank of Spain’s most recent Economic Bulletin last week, the recession is finally over - announcing a modest 0.1% gain in Spain’s GDP for Q3 at the same time. Compared with Q3 of 2012, so the Bank stated, September closed with a decline of 1.2% rather than 1.3%, as previously forecast by the government. Luis Linde, Bank of Spain’s director, confirmed that the rate of unemployment had also decelerated, showing a fall of just 0.1% between July and September of this year. So what implications, if any, does this have for the Costa del Sol property market?

Employment Situation

If you are looking to relocate permanently to Spain in light of far cheaper property prices in Marbella and elsewhere in the beautiful Malaga province, you should be aware that salaries are still tumbling in Spain, as confirmed by the Bank of Spain last week in their Economic Bulletin. This compares unfavourably with other countries in the Eurozone, where salaries are slowly but steadily rising.
 
However, according to the most recent EPA (Active Population Survey) results, Spain’s unemployment rate now stands at 25.98%, or 5,904,700 people out of work, compared to other EU countries. Spanish unemployment declined by 72,800 in Q3 of 2013, confirming a fall of 1.2% compared to Q2. According to Finance Minister Luis de Guindos, the EPA results confirmed a job creation of 39,500 in Q3.
 
Mr de Guindos was quick to point out that an end of the recession would not necessarily translate into immediate job creation across the country, but was hopeful that by the second half of 2014, when Spain’s GDP growth should have exceeded 0.7%, more jobs should become available.

The unprecedented increase in tourist numbers flocking to Spain this year is largely responsible for this job creation - but also a sharp increase in international investor demand for Spanish property, with the Costa de Sol in general and Malaga province in particular seeing a huge increase in interest.

For anyone relocating to Marbella this means either putting up with seasonal employment in the tourism sector for the foreseeable future or creating their own job by setting up in business.
 
There is, however, some activity in the recruitment sector: estate agents are hiring again, but only multilingual and highly skilled, experienced sales staff. The construction industry is also slowly waking up to new opportunities and those who have survived the property market crash of 2007 are now certainly leaner but also wiser with regard to the type of developments people actually want to buy in locations they regard as desirable.

Meanwhile, economy experts like AEA (Analistas Económicas de Andalucía) believe that the Malaga province will prosper again in 2014, predicting a 1.0% growth for the province’s GDP next year. Good news for businesses and therefore good news for relocators looking for jobs in Marbella, Torremolinos, Estepona or Fuengirola.

Residential Real Estate Situation

Although it is fair to say there are still signs in and around Marbella that far too much unsold property is still cluttering up the lower end of the market, there are also indicators that better times are ahead. Certainly within the luxury segment of Marbella’s property market, where resale homes in the price range EUR 200,000 to EUR 1.4m are in high demand.

Emerging markets such as China, Russia and the USA are beginning to flex their property buying muscles. The new Golden Visa enables property buyers spending more than EUR 600,000 on residential property to qualify automatically for Spanish residency - handy, if you’re looking to educate your children in Europe.
 
This has already lead to shortages in the luxury segment of the residential property market, particularly in affluent neighbourhoods where detached seafront homes are increasingly sought after by cash buyers, who want to demolish existing properties and build new homes with a contemporary design.

Up in the hills overlooking Marbella, such as the exclusive Sierra Blanca, La Zagaleta or El Madroñal near Benahavis neighbourhoods for example, property isn’t changing hands quite so fast, but there are some amazing bargains to be found for those with a budget of around EUR 1m. However, such bargains are likely to be snapped up before 2014’s economic revival arrives.