Consequences of the pandemic COVID-19 for real estate in Marbella. Expectations. News.
By Salma Hwedi on - 9m. reading time
The current situation
Coronavirus crisis affects the economy worldwide and its impact on financial markets is massive. However, the luxury real estate market is one of the sectors that have been less strongly affected by the pandemic.
According to portal Fotocasa, “The market for buying and selling homes has become more dynamic following the confinement and end of the state of alarm in Spain. In a few months, the demand for housing to buy has increased from 39% in February to 43% at the end of 2020”. On the report of the General Council of Notaries that has gathered statistics from offices throughout Spain, in 2021 the sale of properties is at a record high. Artur Loginov, the Sales Director of Drumelia Real Estate, confirms that during the last months the company has seen a great number of confirmed investment transactions, especially in the most expensive, elite real estate sector.
As stated by Artur, the facts indicate that in this year 2021 some trends in interest for houses are changing. Drumelia Real Estate, as most of Marbella’s real estate companies and developers, is now embracing new demands and trends in the fields of well-being, work, and health when it comes to our homes.
‘Diario Sur’ and ‘Málaga Hoy’ inform us about the increase of inquiries that have been higher by 30% than last year. Drumelia Real Estate confirms approximately the same increase of online enquires and in-person requests, as compared with the same period a year ago.
According to the Sales Director of the company, the demand for new properties has increased most of all. Artur acknowledges that now it is easier to sell newly built developments than a resale property or a plot. The coronavirus pandemic has provoked people to have something today, right now, and to enter a new home as soon as possible. It has almost eliminated the popular option: buying a home, making repairs and renovations for a year and a half, then moving into it - this approach has gone. Most of the clients don’t want to postpone the dream. Clients also want to have smart buildings with reliable and powerful Internet connections. Some companies on the Costa del Sol state that 7 out of 10 enquires are about brand new or fully renovated properties.
Another change is the size and type of dwellings that are in demand now. People want greater freedom, space and fresh air. The lockdown in 2020 showed the world that it was better to have a villa or a townhouse than an apartment. The situation made us notice the shortcomings that our home could have. COVID is changing our habits. By now, many people have realized that their homes lack gardens, patios, or terraces that allow them to enjoy the outdoors. Therefore, aspects that previously seemed irrelevant to many buyers are now vital to their quality of life. Let’s say, a golf enthusiast wanted to have an apartment with nice views and close to a golf course, now he goes for an apartment with a bigger terrace or a townhouse within a golf resort.
Now people want to buy properties with larger rooms and more open spaces, with more light, with space for tele-networking, and in the end improve the quality of life, even if we have to spend more time at home.
Another rising trend. Some owners put their current home on sale with the aim of finding another property that better suits their needs arisen during the COVID crisis. According to Drumelia, it concerns mostly properties with a price of around 500.000 Euro.
The coronavirus crisis does not seem to have had much impact on property prices in Marbella.
Marbella is a luxury destination of high standing. The quality of life, nature, and wonderful climate make it one of the most ideal places to buy property, either to live or to invest. People who are looking for housing in Marbella are very demanding, but they are looking for the quality of life that they can afford and our town can offer them. According to Drumelia’s data, the price category 1- 3 million Euro shows more clients’ interest. Besides, the demand for luxury contemporary style real estate with a price of over 10 million euros is growing steadily.
The past (2019)
According to INE data, 2019 was the 5th consecutive year of foreign population growth in Marbella, adding 5.38% within a year. The latest statistics of pre-COVID times show that the largest group was Moroccan, then Brits who were registering ahead of Brexit, followed by big groups of Ukrainians and Russians. One of the largest increases was shown by Colombians and French, followed by Italians and Germans. 1 in every 4 residents in Marbella is a registered expat out of 28 nationalities. The real numbers are much higher, because citizens of Ireland, Holland, Belgium, and Nordic countries were not included, besides not every foreigner living in Marbella with an EU passport is registered.
The future (2021)
As long as the sun continues to shine and the sea is blue, Southern Spain will always have the ability to cast a spell on Northern Europeans who are becoming increasingly tired of long winters and cold summers. And now this spell is cast on Americans who are seeking a lower cost of high-quality living, more affordable health care, fewer arms and violence, better socio-political situation and economic conditions - tax, or work opportunities. According to DiarioSur, the number of American buyers in the area of the Golden Triangle (Marbella-Benahavis-Estepona) has grown by 15%. Looks like it will continue rising. Both years of the global pandemic show a growing number of US inquiries and online searches. The crisis causes people to look for new options.
The COVID lockdown in 2020 has actually fuelled the desire of thousands of more potential clients to come to Spain. Most of the population of Central and Northern Europe is desperate for at least a holiday in the sun, and perhaps a longer stay, and who knows, maybe relocation to have a better and healthier lifestyle on a full-time basis. Especially, due to working from home, flexible working practices, and international vaccination programmes. The vaccination plan together with the opening of borders is just what foreigners have been waiting for during the last 12 lockdown months.
The subtropical paradise with the best climate in continental Europe is called Costa del Sol. The local real estate market never loses its attractiveness for investors, at any time. A home is a stable investment in times of crisis, including coronavirus pandemic.
Potential foreign buyers
Pisos.com has recently published an analytical report suggesting that “foreign real estate demand is set to grow 20% this year”, “the holiday home market will be the most dynamic in terms of growth through 2021”, and the main foreign stakeholders in Spanish real estate investment are Germans, French, Italians, Moroccans, British and Swedish nationals, “who will continue to dominate Spanish residential purchases by international buyers”.
The welcome initiative by the regional government of Andalusia and Europ Assistance that will remain in effect for the year 2021 is aimed at boosting foreign travel to the province. It offers “non-resident international travellers of no age limit visiting the Autonomous Region of Andalusia including Costa del Sol, by whatever means of transport, lodging in an officially recognised establishment with an irrefutable booking, during the stay thereof, to receive free travel COVID insurance”.
The new Decree-Law 7/2021 of Andalusia reduces the Property Transfer Tax (from 8-10% to a single flat rate of 7%) and Stamp Duty Tax (reduced to 1.20% from 1.5%). This measure taken by the local government will help to reactivate the economy in the region given the critical situation generated by the pandemic.
Another great news! Forbes USA recently named Málaga province among the “Top-20 most liveable cities in the world”, mentioning its quality of life, environmental situation, climate, healthy Mediterranean lifestyle, low crime rate, infrastructure, cosmopolitan vibe, and easy connections to the rest of the world. It’s not surprising that we can expect US buyers to become new additions to Marbella’s residents.
Regions to show demand
Data analytics are making predictions that the regions to be most in-demand by international buyers and where we can see purchases increase in 2021 are: Andalucía, Catalonia, the Balearic and Canary Islands, Valencia, Murcia, and Madrid.
With many high-end villas for sale, Marbella is in the spotlight for foreign investors, and it is becoming one of the towns where demand for luxury housing is growing the most. Foreigners can apply for mortgages on similar terms and conditions as Spanish citizens.
The Marbella Foreign Residents’ Department confirms that it expects “international movement increases as soon as the pandemic is over”.
Drumelia welcomes clients (2020 - 2021)
Drumelia Real Estate is a truly international and multi-lingual team that speaks 10 European languages, combined. We are confident about doing business with international clients. Currently, they are mostly from European countries, but the Russian-speaking buyers stay and Americans started to appear. British are no longer the biggest property buyers in Spain. The figures produced by Spain’s notaries show that in 2020 the number of properties bought by British nationals was 41% lower than before the effects of Brexit and COVID. But the Brits have long enjoyed a love affair with Spain and they will be back.
If you are thinking of having your own home in warm and welcoming Marbella, purchasing a full-time residence, holiday property, or rental investment, don’t push it to the back of the drawer. We are here to help you have a better life. And what can be better than the world-famous, glorious Mediterranean lifestyle, which has once again been recognized by the Representative List of UNESCO as an “Intangible Cultural Heritage of Humanity”? Enjoy it in the stunning resort town where the sun is bright, people are friendly, food is delicious, culture is rich and fiesta is the eternal essence of life. Welcome!