Despite the on-going recession in Spain and the country’s property market still awaiting a revival, Marbella’s property is still making headlines and not necessarily for negative reasons.
Although one of Marbella’s erstwhile temporary residents may have reasons to complain since he had his properties worth EUR 3 million seized, home owners other than former Egyptian President Hosni Mubarak have had reasons to be cheerful.
For the first time in the past four years the Spanish resale property market saw a marked improvement thanks to foreign buyers, which means a slow but steady recovery may be on the horizon and prices may gradually rise again. Former President Mr Mubarak may have had his seven Playa Esmeralda properties in Marbella’s sought after Golden Mile confiscated, but many Costa del Sol homeowners desperate to part with their homes finally found buyers this year.
The Spanish resale market saw an increase of 11% this year with the Malaga province showing a 3.5% rise of second-hand home sales in the first three quarters of 2012 compared to the same period in 2011. Thanks to foreign investors in real estate the Malaga province remained at the top of the list for home sales, only overtaken by Alicante, Barcelona and Madrid home sales.
Although life at Marbella’s beaches is no longer as rosy and carefree as it once was before the real estate market collapsed at the beginning of 2008, British, Scandinavian and increasingly Russian and Chinese buyers prefer Spain to any other buying destination in Europe. Of the 12,692 second hand homes sold in the Malaga province between January and September 2012, nearly 25% were bought by foreign buyers, according to the Public Works Ministry.
Britain accounted for nearly 30% of buyers, while Scandinavian buyers accounted for a combined figure of 20% and Russians made up 5% this year – estate agents regard Russia and China as their hottest markets for next year. Some 9% of all resale homes were purchased by buyers from Germany, who have come back in greater numbers but remain cautious in the light of house prices continuing to fall this year.
While investors are unlikely to be deterred by negative headlines about the number of repossessions and evictions or announcements of capped pensions in Spain, people looking to relocate to the Costa del Sol resorts of Marbella, Mijas, Torremolinos or Estepona will undoubtedly have to do far more research before buying. Even glamorous resorts like Marbella have not escaped the woes of sovereign debts.
The tough economic situation forced Marbella’s Mayor Angeles Muñoz to issue stark warnings recently with regard to the city’s huge financial debt burden. If Marbella has not alternative but to repay around EUR 15 million every year, the Town Hall will have to shed a large number of staff, the Mayor warned. Such measures would cause even longer queues for those wishing to get their various property and business tax affairs into order and a cash-strapped Town Hall is also unlikely to get involved with new projects in the city such as job creation or improved tourism.
However, for many foreigners life in Marbella is still far more pleasant than facing the economic problems and terrible weather at home. They may have had to sell their properties at lower prices than they had envisaged, but many refuse to leave Marbella, which they regard as their home. For those who were able to pay off their mortgages with cash left over, there is property galore on the market. Downsizing is the name of the game for many Spanish home owners who want to remain at the Costa del Sol.
There are plenty of smaller bargains to be had. Small apartments like 1 bedroom duplex properties within a 5 minute walk of Marbella city centre can cost as little as EUR 75,600 for a 40 square metre property.
A little more luxury and slightly better location facing the beach will cost from EUR 85,000 to EUR 105,000 for a small resale apartment with communal swimming pool, southwest views and easy access to schools, shops and restaurants. An investment of EUR 110,000 will secure a 3-bed apartment with 79 square metres living space.