Stability of the Real Estate Market on the Costa del Sol
The real estate market landscape has undergone significant transformations, marking a milestone in 2022 that looks challenging to sustain in the long term, anticipating an inevitable slowdown in future data. The pandemic has acted as a catalyst for migration from northern to southern Europe, particularly benefiting the Mediterranean regions. New customer demand has doubled compared to pre-Covid levels in 2019, with a record high in 2021. This remarkable increase has translated into transactions in 2022, consolidating a dynamic market.
Despite stability in demand in 2023, in line with the previous year, national home sales and purchases have experienced a drop of 8%. The luxury segment, largely dependent on the foreign market, has been a key player, contributing to total sales in Spain amounting to an impressive €17.5 billion. In terms of financing, 47% of transactions are made with savings, while 53% opt for mortgages, revealing a diversity in purchasing strategies in the current real estate market.
The property market on the Costa del Sol, presents challenges marked by a shortage of inventory. In the second-hand housing market, demand doubled in 2021, reaching a record in 2022, while supply remains tight. On the other hand, on the new construction side, there are encouraging data, with hopes for improvement in the availability of housing supply.
In relation to tourist and rental housing, data has been presented on the situation in the city. Of a total of 100% of units, 56% are used as first residences and 44% as second residences, of which 20% are unoccupied, indicating a sector with potential. Flats are the most profitable typology, with a net 6% of profitability on the second line of the beach and an outstanding revaluation on the first line. In addition to the figure of the golf tourist, there is the emerging profile of digital nomads. In addition, the implementation of a new Tourist Housing Decree-Law to regularise the sector and improve tourist quality is highlighted.
The leading nationalities in real estate transactions continue to be the United Kingdom, France, Germany, Belgium, the Netherlands and Sweden. Regionally, Andalusia stands out with the UK accounting for 16%, followed by Sweden with 12% and the Netherlands with 8%.
2024: Housing price adjustment and stability in Marbella's real estate sector
The horizon of the real estate market on the costa del sol is calm and stable, with an adjustment of prices in the second-hand housing market. There is also limited supply in new construction, which will experience a slight increase in prices. The stabilisation of construction costs and a moderate adjustment in interest rates from the second half of 2024 onwards are aspects of the real estate outlook for the coming year. The Costa del Sol
In the context of discussions on the real estate landscape, experts agree on the critical importance of improving infrastructure as a key element to support the envisaged scenario. The growing demand for luxury housing and market dynamics require strong support from public agencies in terms of connectivity, transport and services. Improving infrastructure would not only facilitate access to housing, but also contribute to the sustainable and attractive development of urban areas, thus strengthening the long-term viability of the real estate market in the region.
It is worth noting that only 15% of real estate transactions in the city exceed €1 million. A total of 35% corresponds to properties below €500,000. Up to September 2023, 65% of transactions were below this figure, showing that more than 50% of transactions are concentrated outside the luxury market. For the coming year, a slight market correction is anticipated, maintaining a calm situation.
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