THE LUXURY MARKET IN MARBELLA IS HERE TO STAY

AFTER financial and pandemic crises, one trend is becoming crystal clear: the luxury market is the most resistant and dynamic of all!
You might have thought that a financial crisis in 2008 and a Covid one in 2020-2021 would have had specialists in luxury real estate running for cover the world over, but in reality the opposite is true. In fact, most are run off their feet with enquiries now, especially in top destinations like the Costa del Sol that offer that seductive blend of five-star appeal mixed with quality of life, abundant nature and sunshine.
Economic recoveries always tend to be a top-down process, as the higher end of the market is more recession and crisis-proof than the broad middle segment, where people simply do not have the same financial reserves to bounce back as quickly and are largely dependent upon periods of fast growth. Even so, the current boom in the luxury property market is very telling, and it is an indication of two important trends.

GROWTH AND DIVERSIFICATION
Firstly, in spite of all the challenges the world has faced in recent years, we have actually seen an increase in both the number and the per capita wealth of High-Net-Worth Individuals – and the growth is significant. The number of people who measure their wealth from the tens of millions upwards even grew during the pandemic, and the pace is speeding up.
• 27% – the increase in people with net worth of over $30 million between now and 2025
• 41% – the increase in ‘ordinary’ millionaires by 2025
• The former could therefore reach over 650,000
• The latter could add a million
Where will they come from? It won’t surprise you to know that Asia will be the key provider of the new rich – for this is a story both of new rich, more rich and wealthy rich, with countries such as China, India and Indonesia leading the way to an almost 40% increase in the region’s HNW population. The US will retain its position as the overall number one, with steady growth, but Europe fares well too, with 23% growth expected. Here, Poland and Sweden are spearheading the process, with impressive rises of around 60%.
The number of wealthy and their overall wealth will therefore continue to grow impressively in developed countries, and even more so in developing parts of the world, including Latin America and Africa. As Flora Harley, deputy editor Knight Frank’s The Wealth Report, says: “…the forecast growth in the number of UNHWIs globally over the next five years represents optimism for the emergence of a new economic cycle and sets new expectations for the post-pandemic world.”

WHAT THEY SPEND IT ON
If the number of wealthy people is growing, their per capita wealth is growing along with it, ensuring a double whammy quantitative and qualitative expansion of the upper segment. This is both in terms of investment and consumption, and has recently been spread more broadly across asset classes including not only the stock markets and business ventures, but also notable art, luxury items and real estate.
Coupled with a notable focus on greater quality of life, and a desire to be surrounded by nature and privacy, it goes a very long way to explaining exactly why the luxury property market is booming in lifestyle locations such as Monaco, the Balearic Islands and Marbella.

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Adam Neale
Terra Meridiana S.L.
77 Calle Caridad, 29680 Estepona (Málaga), Spain
Tel: +34 951 318480 | Office Mob: +34 678 452109
adam@terrameridiana.com | www.terrameridiana.com