The property market on the Costa del Sol will start to recover before the rest of the Spain, argues José Luis Suarez, a professor at IESE business school, and Spain’s leading authority on the housing market.
With its high percentage of holiday-homes built with foreign buyers in mind, Malaga province (home to the Costa del Sol) can count on internationally diversified demand, whilst many other Spanish provinces have to rely solely on local demand weakened by recession and unemployment.
“In the real estate sector, the Costa del Sol is a leading indicator: it went into recession before other areas, and it will start to recover before them as well,” said Suarez in a recent interview with local newspaper La Opinion de Malaga, during an industry conference called ‘In Search of a New Identity’.
Knock ’em down
Suarez also warned that some new developments might have to be demolished because they have no market. “Many of the new homes in stock are flats of poor quality or located in undesireable areas,” said Suarez. “The stock will have to be digested by the market over time but I will tell you one thing: there are some developments that will have to be demolished because they cannot be sold. It’s something we have yet to see in Spain…..though there have been precedents of this kind in other countries.”