The Marbella Property Market Bounces Back
It is official: The Marbella property market has begun a long road to recovery!
All major agents report that the spurt in market activity in April, which we reported several weeks ago, has continued unabated during the whole month of May and into June. Properties are selling again, in all price categories, after a long and cold winter season with a very low volume of sales. Potential buyers were literally “frozen” with fear due to the world economic situation. However, during this period many potential buyers still went out to view properties, to identify what they would like to purchase while they waited for prices to drop further.
With confidence levels rising, we now see people who have been looking for months, even years, now actively buying properties at prices which, only a year ago, they never thought would be achievable. Other potential buyers, misguided by press articles which lop all the markets into the same basket, ignoring historical values, reproduction price, or recent comparative sales, are still making offers of 50% on already severely reduced prices, and end up buying nothing.
There is not a frenzy of purchasing, nor do we anticipate one. But there is good market activity: properties are selling once again, and this trend will continue unless there are further world events which change it.
As defined in our Marbella Property Market Report 2009, the beginning of a market recovery is described as “a significant perception by the market of an increase in the volume of sales”. Price levels of course depend on the level of both supply and demand, and as buyers come back into the market in significant numbers, prices will gradually increase. Although we predicted a beginning to recovery in the last half of this year, there is no question that it has already started.
There will, however, be no rapid recovery in prices. What is selling are properties which are perceived as excellent value for money. Without a doubt, prices achieved in 2006 and 2007 were unrealistically high, driven up by speculation in an over-heated market. Panorama believes that the market will take easily three years to achieve full recovery.
Of course, many of the bank repossessions and developer products currently being offered are products that were tailor-made for “off plan” purchasers/speculators. This type of client no longer exists on the Coast and many of these properties are in areas where very few user-oriented clients would want to purchase in the first instance, no matter the price.
Sales prices being obtained today are similar to 2002-2004 price levels. The better located properties in the most consolidated areas are achieving the best prices but, in all cases, they are below the price peaks of 2006-2007 by at least 15%, and rarely exceed 30%.
Negotiating the sale of a property, however, is far more difficult than in the past. Fiscal issues, checking of planning permissions, first occupancy certificates, market knowledge issues – (where both potential buyers and potential sellers must be shown comparatives of what is really selling today because, more often than not, the owner thinks he is selling for too little and the buyer thinks he is paying too much): all these factors require a highly experienced, quality agent, with full property documentation and excellent product knowledge, to bring the parties together in harmony.
Latest Reductions
Ground Floor Apartment in Monte Paraiso, Marbella Golden Mile Original Price: 695.000 EUR - Current: 595.000 EUR
Spacious ground-floor apartment in the much sought-after urbanization of Monte Paraíso, above the Golden Mile. The complex is fully gated with 24-hour security service, and has several swimming pools, one of which is heated, gymnasium, snac ...
Bedrooms: 3 Bathrooms: 2 Enclosed m² : 164 Terrace m²: 31
Ref: R112-06239
September 14th, 2009 at 9:18 pm
Good to see other areas seeing positive turns. At Polaris World in Murcia since around April/May 2009 we have seen far more positive sentiment from buyers and at the lower price levels prices starting to rise. The sellers are less desperate, the buyers are more optimistic.