Dilip Kuner
MARBELLA’S property market is set to weather the coronavirus storm without sinking to the depths seen in the 2008-14 financial crisis.
This is the conclusion of a new report written by Christopher Clover, CEO of the city’s longest established real estate agency, Panorama Properties, which has been established for 50 years.
It reveals that enquiries from prospective clients dipped by just 2% in May compared to the same month last year.
The report, ‘Purchase and sale of properties during the coronavirus crisis: a market perspective’, forecasts a fall in sales of between 25% and 30% as the luxury property sector relies on foreigners for about 80% of its sales.
But it also predicts a relatively modest drop in final prices of between 5% to 10% in the Marbella urban area.
Clover expects prices to hold up better in the most sought-after locations, especially as the real estate market was nowhere near overheating prior to lockdown. Many more sellers can afford to wait, with there being far fewer distressed sellers than during the financial crash.
He indicates that the foreign market of property purchasers in Spain as a whole will come back little by little in the next few months, with stronger recovery in 2021.
Clover underlined that, unlike what happened in 2008, the market has not remained completely stationary, there have been numerous sales and inquiries and for the first time in Marbella’s real estate history, sales made with virtual video tours.
He said that he is optimistic about the remainder of the year and especially for 2021, as international tourism gradually returns, adding: “There is absolute confidence that we will once again have a healthy real estate market in the medium term.”
Not only that, but Clover has seen a ‘frenzy of activity’ since it was possible to resume physically viewing properties on May 18.
There is also a pent up demand from customers who are waiting for the European mobility restrictions to be lifted before they can visit properties as well as formalise sale and purchase operations.
The report aslo said that that during the confinement some deals were simply put on hold, and there were hardly any cancellations of operations or deposits being lost. This was “a clear indicator of the strength of Marbella as a destination for luxury second homes and quality of life .”
Clover forecast that the market will regain its pre-confinement sales levels in the next year to two years. “It is unlikely that we will face the same scenario of the last crisis, when the market took four years to hit bottom,” he added
Regarding prices, asking prices of one third of the properties Panorama has for sale have been adjusted to become more realistic in light of the current market. On the whole, Clover anticipates that “the real sales prices of properties will decrease between 5% and 10% in the Marbella area, less in the prime and ultra-prime areas, perhaps more in non-prime areas.”
This trend of relative price stability is also observed in new construction, given the solid financial position of the developers.
The best buys will be found only in points of the Costa del Sol where supply is greater than the demand, such as in certain projects in Estepona.
This report is in marked contrast to the views of Javier Sierra, boss of Remax, who forecast a price drop of up to 20%, although his comments were related to the broader national market.
