The property market on the Costa del Sol is recovering much better than the Costa Blanca. I asked industry insiders on the Costa del Sol to explain why this might be.
Malaga province, home to the Costa del Sol, and Alicante province, home to the Costa Blanca, suffered similar declines during 2020, but 2021 has been a different story. As you can see from the chart above, the recover in sales on the Costa del Sol has been much more vigorous than the Costa Blanca. The main reason, it seems, is because Covid is helping to stimulate demand at the high end, where the Costa del Sol excels. I asked industry insiders for insight into what’s going on. Here are a selection of their responses:
Nathalie Dorpinghhaus of Engel & Volkers Marbella explains that the “Costa del Sol is less dependent on British clients than the Costa Blanca, and is also better connected in terms of flights to the rest of Europe.The upper-middle segment has suffered the least during this pandemic, and the Costa del Sol has a greater number of high-end properties for high-end clients.”
Pia Arrieta of DM Properties Marbella echos the diversification of demand on the Costa del Sol, which is no so dependent on British demand as the Costa Blanca, and adds that “price fluctuations are less steep than in other coastal areas, especially in the higher end of market, which translates as “safe investment” from a buyer’s point of view,” and helps bolster demand that is perhaps more skittish in other areas.
Sean Woolley of Cloud Nine Prestige, who works both coasts, explains that “the Costa Blanca has been quiet in terms of transaction, though enquiries have held up, but on the Costa del Sol we have had far more viewing appointments, and the conversion rate has been double the normal rate, particularly the high end, the higher the better. Anything over a million, and particularly anything over three million, is selling very quickly. I’ve never seen anything like it in the last 20 years. Costa del Sol clients are typically self employed or high up the corporate ladder, with more flexibility over travel, and stronger finances than most, whereas the typical client we deal with on the Costa Blanca with a budget in the €200,000 to €300,000 range tends to be employed, and find it more difficult to get away. The lower budgets also mean a bigger financial commitment relative to net worth, and such big decisions have deterred the less well-off from buying during this pandemic. At the high end, a lot of seriously wealthy people are now buying on the Costa del Sol, and driving the market higher.”
Felix Joseph, a property consultant and investor from Property Under One Roof, who advises clients on strategy, says “my take on this is based on basic economic principles and demographics. The COVID 19 pandemic and its subsequent lock-downs have created a duality in economic fortunes. By now we know very well that certain companies and industries such as tech or fulfilment have boomed as a result of the Pandemic and the lock-downs increasing their profits to the tune of trillions, whilst other industries, such as hospitality, tourism or the gig industry in the UK have been decimated. As such I think the people who have benefited from the lock-down, government assistance or furlough wealth creation are part of the demographic who favour the Costa del Sol, whereas the demographics who would normally be buying in for example Alicante are on the side of the populace who slipped between the government assistance and lock-down profit net. Add to this the biggest driver of the Spanish property market, the Spanish and their government’s woeful economic response to the Pandemic and it’s clear to see why property movement has stagnated in big cities such as Madrid or Barcelona. Cities may also be suffering from the fall in demand created by the ‘Work from home’ cat that is clearly not going back in the bag. I’d also hasten to add that from what I’m hearing, it’s not the whole of the Costa del sol that has had a resurgence in interest. It’s only the top quartile in terms of property prices that have had significant interest and movement. Big Villas are selling but the bottom half, 2 bed 2 bath apartments much less so and remained very stagnant in sales turnover and price movement. This is my opinion as to the driving forces behind the phenomenon demonstrated in the graphs. But please remember that I am by trade an economist, so as you well know, our hypotheses and are often famously wrong.”
Fred van Krimpen of Elite Inmobiliaria says “last year 2020 was a crazy year for me, sales were booming and I had one of the best years since beforde the financial crisis. I guess sales went up by over 30%, and first for me was selling several properties by video call. This year started a bit slower, but in the last few weeks things are picking up again. Days of 10-12 hours are no exception. Notaries tell me that in the last few weeks sales went mad, but this will not be reflected untill the Registrars confirm the amount of inscriptions in a few weeks or months. Buyers on the Costa del Sol in my experience are now mainly Swedish, Finish, Dutch, Belgian buying because they get no interest on their money in the bank, and working from ‘home’ can now mean from a nice place with a better climate like the Costa del Sol. Many Scandinavians and Dutch have bought property in their home countries years ago, and as the property market there is soaring, they sell and invest in the Costa del Sol.”
Runa Kristin Sorthe of Marbella Estates says “the Costa del Sol has residential tourism; people who come and go the whole year, as opposed to holiday tourism which I find more common on Costa Blanca. Many buyers have even come with plans to work remotely from here. And many residents have changed to properties with more outdoor space. The Costa del Sol has more expensive properties, and buyers looking for those properties and the quality of life to go with it. And the rich haven’t stopped travelling or been restricted in the same way as the lesser fortunate due to Covid. On the contrary, we have seen many more sales than usual in the higher end of the market, driving up both the numbers and the value.
Adam Neale of Terra Meridiana says “it’s all about budgets: most sales that have occurred have been at the mid to top level in the last 12 months, hundreds of millions have been spent in Marbella, Benahavis and Estepona alone. This is a client that does not exist in Costa Blanca but is very common on the Costa del sol. We expect the return of the low to middle market this Summer when borders re-open.”
Daniel Skinner of Right Casa says “I think there are a number of reasons why the Costa Del Sol is becoming so popular: 1) Malaga airport is increasing its flight routes throughout Europe, and America, which obviously makes it more attractive – Easyjet have made Málaga its central operations hub. 2) Covid Restrictions are more relaxed here than on the Costa Blanca. 3) Malaga has better transport links locally and internationally. 4) Google is investing heavily in Malaga, with a new security centre – this will cause a ripple of tec companies around. And 5) the Golf clubs here directly appeal to American investors.
Christopher Clover of Panorama Properties says “the market here is exploding with activity, it’s been our best first four months of sales ever. Enquiries are double that of 2019, and sales volumes are more than double 2019, which was a good year before the Covid pandemic. Higher priced properties are in great demand, partly because developers now offer world class refurbishments/new builds that we never had before in this area. I think we are realliy now entering a golden age for Marbella and the Costa del Sol, helped by the way Covid has changed how we live.”