Reasons to invest in property on the Costa del Sol
After many years of economic decline, to invest in property in the Spanish market is attractive again to investors and savers from other countries. Foreign investors are betting for the Spanish real estate market, representing 20% of the property investment in Spain. Another reason for this growth is that the requirements to request a mortgage are becoming less strict, the families need less monthly incomes in order to buy a property, which generates more buying-selling activity in the market.
Key Capital Pertnerships have access to all properties for sale in all the key real estate areas on the Costa del Sol including Marbella, Puerto Banus, Estepona’s New Golden Mile, Benahavis, San Pedro de Alcantara, Nueva Andalucía, Marbella Town, La Cala de Mijas and the increasingly popular area of Marbella East.
Why is Marbella an ideal location for a good property investment?
With a rise in property prices, sales transactions and both local and foreign demand, there has never been a better time to purchase a property on Spain's Costa del Sol. Here is a brief run through of the latest statistics that contribute to a flourishing property market in the region and an opportune moment to invest in a property on the Costa del Sol today
Rise in optimism
The powerful recovery of the Spanish property market is due in part to a significant increase in optimism and confidence amongst investors, property experts and Spanish lending institutions, all of which have contributed to the sweeping sentiment that the market conditions have improved and will continue to moving forwards.
Positive news headlines have attracted new buyers to the region, a surge in new developments as well as an incredible array of new internet resources, including mobile applications, guidebooks and niche expertise services available to the prospective buyer, such as tailored viewing trips and expert assistance in a range of languages.
Strong foreign demand
With a renewed surge in international attention, including features in popular property broadcasts in the UK like 'A Place in the Sun' and serious interest from the wider European, Russian, Arabic and Chinese markets, foreign demand for property in Spain rose by 15.6% in the first quarter of 2017, according to a report by the Spanish Land Registrars Association. Foreign interest in the Spanish property market, particularly in popular coastal regions such as the Costa del Sol has significantly contributed to both the recovery of the market in the region and its continued allure to prospective buyers globally.
Pre-crisis levels of sales translations
The Spanish property market continues to gain momentum as new government statistics show sales figures rose by nearly 30 per cent in March. A total of 40,461 homes were sold in March 2017, the highest monthly figure reported since February 2011, marking a return to pre-crash levels from 2008 and year-on-year increases in all of Spain's 17 regions.
The cumulative sales total for the first three months of 2017 now stands at 111,528, a healthy 15 per cent higher than at the same point in 2016. The running 12-monthly total has now reached 419,000, also an encouraging 15.1% higher than a year ago.
Greater access to funding
Spanish banks have resumed lending to foreign clients with significant discounts on quality properties across the Costa del Sol due to enhanced market morale. Mortgage for residential property in Spain appears to have achieved a level of stability and gradual month by month growth in all 17 regions. Driven by increased activity in the Spanish property market over the last 18 months, analysts believe the record low level of the Euro Interbank Offered Rate, or Euribor, could be prolonged for at least another two years and fixed rate mortgages could continue to grow in popularity in Spain.
With consistent levels of sales transactions in the region and ever increasing demand, the number of budget and re-possessed properties is depleting and becoming increasingly difficult to replace. This will have the natural effect of rising property prices as confident sellers hold out for higher premiums. An annual price rise of 7.74% has been recorded across Spain by the Spanish Land Registry, the highest rise since 2007.
The most important aspect is finding the right property to suit your needs. Will it be a vacation home or a permanent residence? Will it be rented out for supplementary income? Before committing any funds, one must be sure that the selected property is a solid investment. Our local partner can assist you with every step of your application process, including the property purchase. Allow us the opportunity to guide you to a Spanish Golden Visa while simultaneously investing in a property (or properties) with great future potential. Now is the time to invest.
The Marbella Property Market Report 2018
The residential property market has improved significantly in the Marbella area as well as in the entire country in 2017, consolidating the trends established in prior years.
Looking first on the national level, political uncertainty on several fronts in 2017 proved itself to be insignificant in comparison to the positive impetus generated by macroeconomic factors: GDP growth above 3% (with a similar forecast for 2018), record numbers of tourists, declining unemployment, an improving international credit rating, and record low interest rates all point to a positive outlook for the Spanish economy and the property market for the foreseeable future. Property professionals, as well as the banking sector, have announced that the beginning of another Golden Age for Spain’s housing sector is upon us, but this time, without excesses, until at least 2022.1&2
The increase in the volume of residential property sales nationally in 2017 has been, as expected, the largest since 2007, rising 14.6% over 2016 with Málaga province leading the way.3 Annual national sales figures show a total of 464,423 properties sold in Spain in 2017, climbing from a low of 312,593 in 2013 to the highest number recorded since the 2008 property crash.4
Little effect of Brexit on UK nationals buying in Spain
Of the total number of residential sales made in Spain inscribed in the land registry in 2017, 13.11% representing 60,885 sales were made to foreigners. UK nationals lead the field with 9,114 purchases, in the same manner they have since the early ‘80’s. France and Germany followed in second and third place with 5,285 and 4,731 purchases respectively, both at around half the number of UK purchases.5 This is clear evidence of the surprising resilience of the UK market to date, in clear defiance of the weakness of the Pound Sterling, and the woes of Brexit.
Nationality of buyers in Andalucía
Coming closer to home, we have included the Land Registry statistics6 showing the percentage of foreign purchasers in Andalucía by nationality, for which at the writing of this report, only the 2016 numbers are available
It is interesting to note, here also, the continued strength of UK purchasers, comprising 26.82% of the market in Andalucía for the year 2016 compared with 19% on a national level (same year), and almost two and a half times more than the Swedish who are in second place.
Marbella-area property market is more resilient and mature than the national market
The property market touched bottom in our city in 2011 with recovery starting in 2012, two full years before the rest of Spain. Led almost exclusively by foreign investors/purchasers from many different countries, the “multi-source” international market has always distinguished the Marbella market, as well as most Spanish resort areas, from the rest of the country.
The increase in sales volume in Marbella from 2014 to 2015 was an extraordinary 28.3%, as buyers—some of whom had been waiting for years to buy—rushed to purchase the best bargains before prices started to increase.
Consequently, the market recovery in the Marbella area is more mature than the national market, and percentage sales increases have begun to level off, whilst still increasing on a national level. For example, on a national level the 2017 sales volume is still 21% below that of pre-crisis levels of 2007, whilst in the Marbella-Benahavís-Estepona area, the 2007 sales volume has been surpassed by 10.4%.7
Marbella area sales (Marbella, Benahavís, Estepona) in 2017, contrasted with prior years, can be seen on the following table. Overall one can see an increase in sales volume of the three municipalities from 2016 to 2017 of 11.15 %.
- Substantially greater availability of fully zoned development land in Estepona compared with Marbella.
- Delays in obtaining building licenses in Marbella of a year or more, pushing developers to buy land in Estepona and Benahavís where licenses are granted far more quickly.
- The relatively lower prices of properties and land in Estepona, compared with the most consolidated (and often more prestigious) residential areas of Marbella.
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