On the Costa del Sol, there have been big shifts in the last year in who is buying and why they are buying, says Martina Heynemann, managing director of Viva, the property company.
Ms. Heynemann is an expert on the region. Viva has been connecting buyers and sellers in the Costa del Sol for 17 years, and has grown into one of the biggest independent real estate companies in the area, with 13 offices.
In an interview with SPI, Ms. Heynemann discusses the latest trends in the Costa del Sol property market — and why it’s time to start building new developments in the area.
How is the mix of listings on Viva different now than a year ago? Different types of properties for sale?
Our mix of listings is very similar to what it was a year ago, with a similar number of apartments, townhouses and villas being listed. Compared with last year, however, the main difference in the types of property for sale is that in prime locations – especially in Marbella – new build developments are now coming to the market and off-plan sales are once more taking place on the Costa del Sol. The difference between this year and last year is though, that Viva has exclusive development products for sale now.
What are you seeing in asking prices?
In general terms, in the case of resale properties, in order to close a sale there is usually a difference between the initial asking price and the final sales price. I’d say that this difference is typically around 8 per cent. So far, as off-plan sales at new build developments are concerned, this difference doesn’t exist and the prices established by the developers are adhered to.
Where are queries coming from these days?
Unlike in the past, nowadays we receive enquiries from a much wider range of countries. Currently, in addition to the U.K. and Ireland – which used to be the countries from which most of our clients came – we are also receiving a significant volume of enquiries from other countries, mainly Scandinavian countries, Belgium and France, Holland, Germany and Russia. A large proportion of these potential clients are captured via our website, our agents network and the international property exhibitions that Viva attend, all of which are our most dynamic channels at the present time.
Are buyers looking for second homes or investment properties these days?
I can definitely say that these days there are many more end-users looking for properties on the Costa del Sol than investors. It used to be the other way round, with the majority of our clients being investors with an eye on making a profit in the short- or medium-term, rather than end-users. This is a very significant change which will help the property market to maintain stability in the future. Equally important is the fact that it will contribute enormously to the Costa del Sol’s consolidation as a leading destination for both holidaymakers and owners of second homes alike. Many of these new buyers are purchasing a property that they will use as a holiday home in the medium-term, while also planning to retire to it in the future.
What price points are attracting the most interest?
At Viva, we have clients looking for modest properties priced from €100,000 to € 300.000… but of course we have 20 per cent of our clients looking to buy villas and apartments from €500.000 to €1.5 million. These are the budgets of the majority of our clients. Then there are a much lower percentage of clients with a budget of several million euros.
How would you characterize demand in the market now?
Our buyers are typically much more knowledgeable and qualified than years ago. They know precisely what they are looking for both in terms of property type as well as location, and they have researched the market before even coming to see us. They are financially solvent and have very specific ideas as to what they want.
What is happening in the market that is not being reported?
Well, at VIVA we have noticed the huge interest that potential buyers now have in new build developments. Many of our clients perceive that a large part of the Costa del Sol’s existing product is becoming outdated or perhaps is not as well-maintained as it could be. And for those reasons they prefer to buy a property on a new development which, although still under construction, has been built to advanced, state-of-the-art specifications.
Consequently, we have also detected a substantial growing interest, both on the part of investors and developers, to acquire land for the development of holiday and second homes.
What impact has the Golden Visa had on queries?
Actually, we haven’t really noticed much of an impact at all. We have received various enquiries because of the Golden Visa, but for the time being at least, we don’t consider that the Chinese or Russian markets have been greatly influenced by the opportunity of buying Costa del Sol properties in order to obtain the Golden Visa.
What is your forecast for when the market will start to recover?
We firmly believe that the recovery of the Costa del Sol property market has already begun… especially in the consolidated areas of the coast where new projects are already underway. Thanks to the foreign market, the Costa del Sol began to show signs of bouncing back, a recovery that was clearly evident in 2013 and which, to date, has also been demonstrated in 2014.
What do you think is the biggest obstacle to recovery?
Without a doubt, the single largest obstacle to recovery is the difficulty faced by developers needing access to credit facilities in order to build high-specification new developments with all the latest advances in place. We have detected a serious lack of product in sought-after, consolidated areas of the Costa del Sol which – if it existed – would clearly serve to reinforce the recovery of the property market.
Also the buying cost for purchasing a property in Spain is very high.
What are your future plans for your company?
To continue our expansion, develop our brand still further, and to offer our clients the very best service possible.