The time it takes to sell a new development on the Costa del Sol has reduced by more than 50% reveals a new study by real estate consultants Aguirre Newman.
The time it takes to sell out a new development of apartments on the Costa del Sol fell from 104 months in the period May 2014 / May 2015 to 52 months in the period May 2015 / May 2016, shows market research by Aguirre Newman. I assume they based their findings on average sales velocities in the two periods.
That means that new developments on the Costa del Sol are now selling twice as fast as they were a year ago.
The time on market for a new development of single-family homes like townhouses and villas fell from 55 months to 23 months in the same period, a decline of almost 60% in the time on market.
NEW DEVELOPMENT GATHERS PACE
Aguirre Newman also found the supply of new homes for sale has increased by 5% to 15,555, the first increase since 2007.
The number of new developments started on the Costa del Sol rose 69% to 49 developments under way compared to the same time last year.
The average size of projects was 89 units in the case of apartments, and 22 units in the case of single-family homes.
The average apartment for sale in a new development had 133 m2, and a price of €223,050 (1,680 €/m2). Single-family homes had an average size of 425 m2 and price of €1,007,694 (2,372 €/m2).
New apartment prices were stable compared to a year ago, whilst villa prices were up 39%.
Sales were driven by strong international demand led by the British, Belgian, French, Swedish and German market. In some municipalities Russian demand was once again growing in importance. Note that this research took place before the UK’s Brexit vote to leave the UK, so British demand might have fallen since then.
Marbella was the leader in terms of new development, but Estepona also picked up strongly, in part due to town planning problems in Marbella.
Aguirre Newman report that the market for building land on the coast has been very active, largely due to interest from international funds, leading them to forecast there will be further increases in the number of new developments coming to market in the next few years in areas like Marbella, Estepona, and Mijas Costa.
Aguirre Newman forecast that international demand for new developments on the Costa del Sol will continue increasing, and Spanish demand will join also increase as the local economy picks up. They forecast demand up 6 to 7% in the next year.
They also forecast the price of apartments on new developments will rise 8% to 10% in municipalities like Marbella, Estepona, and Casares. In other areas where there is still a glut of never-sold homes on the market prices will continue to stagnate.