Marbella, Marbella, Marbella

2018-03EngelVolkersThe real estate market on the Costa del Sol is going from strength to strength, yet one constant fact remains – it’s all about the location.

The Marbella property market has been plagued in recent years due to the annulment of its General Urban Planning regulations (PGOU), which have only been reinstated. One of the effects of this was a slow down in granting building licences for new construction in the Marbella area at a time when buyer demand was increasing. As a result, major investors, who are typically always in a hurry to reap the rewards of their investments, looked to other areas of the coast where they could get planning approval through without a wait. It may appear that these new areas, where new developments are springing up at a rapid pace, are the new most desirable locations, but this is not strictly true. Any buyer looking for a property on the Costa del Sol now, should be aware that things are not always as they seem and are advised to do their research into the market conditions.

Supply vs demand

What we are currently seeing is an over supply of property in some areas with a corresponding slowing down in sales. Eventually, we can expect that prices will not rise as predicted by developers and promoters,. Many of these off plan new properties have been purchased by investors and most likely will all come together as re-sale on the market when completed. And those buyers who are not first in will discover that the resale potential is also reduced due to the high supply.

Marbella, on the other hand, offers an exceptional opportunity for buyers and sellers who take an educated approach to the local property market. As Smadar Kahana of Engel & Völkers in Marbella says: “ location, location, location – this has been the name of the game everywhere and always, not only in Marbella. You’ll never lose money if the location is right,” and in her view, Marbella is in the unique position of being a location where buyers can always be sure to keep the value of their investment and, with the right product, also make gains.

She pointed out that the lack of newish properties has meant that demand is outstripping supply in the Marbella area, which takes in the wider area stretching from Cabopino in the east to Nueva Andalucia in the west. “ Properties in prime locations that come on to the market in Marbella are like a precious jewel due to the shortage of luxury properties,” Smadar remarked. And, because of this, Marbella properties hold their price and sell faster than other areas, although the price has to be right and the presentation as well.

“When I look at the escrituras for re-sale properties from our portfolio, I can confidently tell you that our clients haves not lost money on any purchase in any prime location in Marbella . And when the property, new or old is coming on the market on the right price, it will sell in a reasonable time frame.

The Marbella market

Currently, the Marbella market is split into three sectors:

1.A limited off-plan market because of the lack of a PGOU and building licences
2. Older properties that are being bought for complete refurbishment
3. A traditional resale market.

Smadar commented, “Because of the low number of new developments in Marbella, compared with some other areas on the coast, the newest properties you find are properties built in say the period 2003 -2005., and only few newest. Most of the buyers arriving right now are looking for modern, newish properties in the contemporary design and with the latest techniques and trendiest materials, and there aren’t enough available to satiate the demand. However, the market is currently offering another solution. We see many investors and funds buying the older properties and completely refurbishing them. This does not mean giving them a quick coat of white paint everywhere, but with an overhaul of the entire interior using top quality materials and modern design. This typically includes rebuilding the walls and installing all new electrics and pipes, as well as updating the floors, bathrooms and just about everything else. One of the advantages of this approach is that it doesn’t require full building permission, but only a licence to refurbish, which is granted much quicker, providing the work stays within the original footprint of the plot on the escritura. The result is a win-win for both seller and buyer, because these ‘modernised older properties’ offer beautiful new homes and sell fast, as well as satisfying the desire for a contemporary residence of high quality finish.

Advice for buyers

Smadar, as well as the whole E&V team advises buyers to look carefully at a property when buying. Smadar isn’t referring to simply viewing the property, but looking at the location with an eye to eventual resale, as well as recent sales in that area. One question buyers should always ask is: is the price right for the area? “Unfortunately, We are seeing a fair amount of overpricing of re-sale houses happening in Marbella,” Smadar remarked, “and while sellers think it’s wonderful to be given a €7.5 million valuation on a property that should really be valued at €4.5 million, they then find that it just won’t sell.”

This is not a new practice, more is it confined to Marbella, but it does have a negative effect on the property market.

Smadar said: “At Engel & Völkers we take properties to market at the right price with a full responsibility to the seller that we can sell for the highest market price, however, we are not magicians! Every property has a market value and buyers will not pay more.

Engel & Völker’s success in the Marbella market also relies on its specific method of property valuation, which is used by every E&V office worldwide. The firm believes in getting the best possible price, but never a price that will result in a property sitting unsold for sometimes years. Added to this, Engel & Völkers have the advantage of a well developed buyer database, which ensures the greater likelihood of a swift sale and this is something that a real estate agent who has opened an office overnight, just doesn’t have access to. “Real estate agents need to be more responsible in their valuations and not over value just to get the property on their portfolio. Sellers should consider an agent’s experience and expertise in selling properties in that location as well as their overall performance in property sales, marketing and their real ability to sell.”

To sum up, when looking at where to best invest in property, Marbella and its prime locations is still a winner. Due to the current changes in the town hall, building licences are now coming through quicker and new, contemporary developments, such as La Meridiana Suites, The Collection and some more will soon have their licences and construction will start. However, there are only a handful of properties still available in these developments, signalling the strong buyer interest. “We have many international clients searching for a property in Marbella but just cannot find what they are looking for,” Smadar concluded, “most of them are really searching for a luxury new apartment or house with modern design and the highest standard but don’t see Estepona or Mijas as an alternative; they definably want to stay here, in Marbella, in the best location.

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