This is a website for buyers, owners, and sellers of property in Spain, offering reliable information and resources to help you get things done with confidence. It is run by Mark Stücklin, author of the Spanish Property Doctor Column in The Sunday Times (2005-2008), and the book ‘Need to Know: Buying Property in Spain’ published by Collins.
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.”
Bear Market says:
This article falls short in terms of the quality of insight we have come to expect on this site. It’s more like an advertisement than it is anything else imo. The data and graph could have been expanded upon to put things in perspective where the markets & their ‘recovery’ are concerned as a whole including putting into perspective the reality of comparing months when Covid first became an issue with recent times.
Having been in the market for a 7 figure property on the CDS since the start of 2020 and been in regular contact with a few agents who do not try to BS me I can state their take is very much different to those quoted here! Funnily enough one of the firms here happens to also be one of the firms I’m in contact with and their comments do not match up in the slightest. I’m inundated with emails on a weekly basis offering high end properties at discount, with many being offered with a second and third discount over the course of the last year or so. We are also witnessing high end new builds being offered for (re)sale st prices below the buy new price. Very recently one of the best value villas in La Zagaleta went to auction with no reserve, it would appear it failed to sell as the limited bidding activity looked to be suspect in that in almost most certainly was being done by the vendor themselves to push up the price. Said property had been on the market for a few years at a price below build cost to no avail.
Lastly I’ve been monitoring 30-40 properties in the range described in the article over the course of the past year and the things they have in common is nearly all remain unsold and many have been discounted.
As is the case with politicians great care should be taken when any estate agent is seen to be commenting on the state of the market.
When is a great time to buy according to any agent ? ~ Now is always the answer ~ which of course is not the case.
Mark Stücklin says:
Bear market, thank’s for your input. It certainly gives another side to the story. If you are a regular reader you’ll notice I rarely quote agents, and none of those quoted here pay me anything, so it’s not a case of advertising or advertorial. I just thought I would get opinions from agents for once. I assume everyone understands they have their bias, and discount accordingly, but it’s still worthwhile hearing what they have to say. After all, they are closer to the market than I am.
mscholder says:
Hola Bear Market,
It was great hear about your experience and insights. We have been house hunting for a while but awaiting the next recession to correct house prices before a purchase, but that strategy failed. We are motivated to buy soon as we are now both retired. Would you please share the names of the no B.S. realtors?
Gracias, Maryse & Michael
Paul Payne says:
Taking into account, when you are talking about sales and the chart refers to “sales in February (published by INE based on land registry inscriptions)” is info released by the land registry and these are sales signed in title deed (land registry) so this can be sales of one year or just one month before, not actual sales on that month.
The explanation is that in Malaga more title deeds were signed than in Alicante for that period (February only), meaning that there are more sales?, possibly yes, but maybe not, because in Alicante there could be more pipeline pending to sign title deeds than in Malaga but we don’t know yet.
I would prefer to know this number not on one unique month but for a period of six months or a year, that is more representative that see only a month.
In short, too many ‘maybe’ and ‘possible’ and one month of signings at the notary tells us very little about the market or actually agreed sales.
JMG says:
I agree with the agent who says that there is a lot of interest from Dutch and Scandinavian nationals.
East of Malaga, I have noticed an huge influx of Dutch buyers. As many UK nationals have sold up and left Spain over the past few years, they are being replaced by mostly Dutch and Belgian buyers and further along the coast, Scandinavian buyers.
Properties are selling quite quickly around here and the market is better than it has been for years, partly due to the regularisation of country properties via DAFO I imagine.
Things are looking good.
fishing100 says:
Are people forgetting that the Germans are now vacating Spain like the marie celleste due to taxes imposed in Germany on second homes and homes outside of Germany.
As stated by Bear Market, if the property market was that strong in the CDS why do agents persue the hell out of those looking and researching for property.
Simple answer is lots of property, few serious buyers. Poor quality property in general apart from new builds with asking prices that are off the scale in relationship to quality / value.
Very few in the uk would even market their property in the same condition as those in Spain are doing and expect to obtain the asking price.