More than 600 professionals attend the analysis of the real estate sector in Marbella during the Market Study days organised by LPA
- Marbella remains competitive, occupying the 9th spot in Spain and the 16th in the world in the price of housing per square metre
- Experts highlight the importance of the endorsement of public bodies in terms of connectivity, transport and services
- Additionally, a shift in prices and stability is expected in the sector from the second week of 2024
Marbella, 1st December 2023 – Yesterday the annual conference of the “Study and Evolution of the Market” took place, organised by the Association Leading Property Agents of Spain (LPA). The event, carried out in the Palace of Exhibitions and Congresses of Marbella, brought together more than 600 experts of the real estate sector and was inaugurated by José Eduardo Díaz Molina, Delegate of Human Resources, City Planning, Citizen Security, Industry and Public Roads of the Marbella City Council, and José Carlos León, President of LPA. There was in addition, the participation of Tomás Gasset, CEO of Urbania International and the Board of Directors of the Association composed of Mia Pearlman, of Affinity Spain; Setareh Moreghi of Gilmar and Chris Clover, of Panorama Properties.
“The presence of LPA in our community plays a crucial role in the development and strengthening of the local real estate sector. Marbella and the Costa del Sol have witnessed their tireless commitment to excellence and the professionalisation of the industry, promoting ethical and sustainable practices and this type of conferences, focused on the analysis of the present and future of the sector, are essential for strategic planning and sustainable growth in our region. They provide a valuable space for collective reflection, knowledge exchange and the establishment of guidelines that will benefit both professionals in the sector and citizens in general,” spoke the Councillor for Urban Planning.
José Eduardo Diaz Molina concluded his statement by expressing his gratitude to all attendees and especially to LPA for their continued collaboration. He stressed the importance of public-private collaboration for the balanced and prosperous development of the city.
Stability of the Real Estate Market in the Costa del Sol
The real estate market has undergone significant changes, marking a milestone in 2022 which seems difficult to maintain in the long term, thus anticipating a logical decline in future data. The pandemic has catalysed migration from northern to southern Europe, benefitting Mediterranean regions in particular. Demand for new customers doubled compared to pre-COVID levels in 2019, particularly highlighting the record reached in 2021. This significant increase resulted in transactions in 2022, consolidating a dynamic market. Despite the stability of demand in 2023, in line with the previous year, sales at the national level experienced a decrease of 8%. The luxury sector, largely dependent on the foreign market, has been a key player, contributing towards total sales in Spain amounting to an impressive 17,500 million euros. In terms of financing, 47% of transactions are made with savings, while 53% opt for mortgages, revealing diversity in purchase strategies in the current real estate market.
The real estate situation in Marbella presents challenges marked by the shortage of inventory, with notable decreases of 20% and 40% in beach areas, generating a constant demand. As for the second-hand market, demand doubled in 2021, reaching a record in 2022, while supply remains low. On the other hand, in the field of new construction, there is encouraging data, providing hope for improvement in supply.
Data from Idealista reveals an average price of 4,237€ per square meter, 15% higher than in 2022 according to the property register, placing value at €3,320. The appraised value of housing also experienced an increase of 11.72%, reaching 3,145€. In particular, renovated and new apartments exceeded 6,000€ per square meter, reaching 25,000€ in coveted areas such as the Golden Mile.
In reference to tourist rental accommodation, data was presented during the conference on the situation in the city stating that from all total units, of which 56% are first residences and 44% are intended as second residences, of the latter which 20% are empty, there exists a potential sector. The most profitable typology is apartments, with a 6% net profitability on the second line of the beach and a notable revaluation on the first line. As well as the figure of the golf tourist, digital nomads a new profile to consider. In addition, the implementation of a new Law Decree on Tourist Accommodation to regularise the sector and improve tourism quality is noteworthy.
The nationalities leading real estate transactions continue to be those of the UK, France, Germany, Belgium, the Netherlands and Sweden. On the regional level, Andalusia stands out with the United Kingdom representing 16%, followed by Sweden with 12% and the Netherlands with 8%.
2024: Price adjustment and stability in the real estate sector
The panorama of the real estate sector in Marbella is seen as serene and stable, with a price adjustment in the second-hand market, accompanied by a limited offer in new construction, which will experience a slight increase in prices. The stabilisation of construction costs and a moderate adjustment in interest rates from the second half of 2024 are aspects contemplated in the real estate horizon of Marbella.
Within the framework of discussions on the real estate landscape, experts agreed on the critical importance of improving infrastructure as a fundamental element to support the planned scenery. The growing demand for housing and market dynamics require strong support from public agencies in terms of connectivity, transport and services. Improving infrastructure would not only facilitate access to housing, but would also contribute to the sustainable and attractive development of urban areas, thus strengthening the long-term viability of the real estate market in the region.
It should be noted that only 15% of real estate transactions in the city exceed one million euros, while 35% correspond to homes below 500,000€. Until September 2023, 65% of transactions were below this figure, showing that more than 50% of transactions are concentrated outside the luxury market. For the upcoming year, a slight correction of the market is anticipated, maintaining a steady situation.
The discussion panels addressed crucial issues for the real estate sector, from uncontrollable intrusion to the need to regulate activity, establish a code of ethics, work toward transparency and defend the rights of the final consumer. The interview with Tomás Gasset, CEO of Urbania International, provided a valuable perspective on business leadership and relevant issues such as humanisation of the soil, the need to create models of cities in line with current society and projections of a possible new crisis.
“In analysing future prospects, the challenge lies in prices, which are reaching unsustainable levels even in places like Marbella, which is perceived as a real estate oasis inaccessible to many. Land release and bank financing are obstacles, but the inflow of Next Generation funds is seen as a response to sustainable cities and urbanisations, as well as social housing initiatives. The adaptation of cities to new social models is essential, and for this we must advocate innovation and sustainability as fundamental imperatives in the evolution of the real estate sector,” stated Tomás Gasset, CEO of Urbania International.
Since its foundation in June 2020, LPA has experienced significant growth, from 11 to today´s 47 members. It focuses on fostering a transparent, cooperative, professional and customer service oriented real estate sector. The organisation combines the latest technologies and knowledge with traditional values of ethics and personalised attention to achieve its objectives. Future initiatives include the creation of a sales school and the establishment of a Code of Ethics of Good Practices to internally regulate real estate agents and the operation of the sector, pending administrative regulation.
The event concluded with a call for the professionalisation of the real estate sector and reflection on the challenges and opportunities that mark the current state of the market in the region.
“In line with our commitment to modernise the industry, LPA integrates the latest technologies and knowledge, while maintaining the traditional values of ethics and personalised attention. We are proud to have reached significant milestones since our foundation. With today’s event we reaffirm our commitment to the professionalisation of the real estate sector and reiterate our dedication to raising the standard of the real estate sector. We invite you to consider the current challenges and perspectives that shape the market environment in the locality. Integrity, ethics and the pursuit of excellence remain the fundamental principles that underpin our association,” expressed the president of LPA during the conference.
In June 2020, a group of eleven professionals in the real estate sector, with more than 20 years of experience in the Costa del Sol, founded a group of developers and real estate agents of the Costa del Sol, Leading Property Agents of Spain (LPA), under whose umbrella are grouped today a total of 34 companies of the Costa del Sol.
Since its foundation, LPA has grown both in membership and reputation, making strides towards its stated goal of fostering a transparent, cooperative, professional and customer service-oriented real estate sector in this important regional market.
In order to achieve this, the organisation applies the latest technologies, tools, and knowledge along with the traditional values of service, ethics, and personalised attention.