Marbella Luxury Real Estate Immune to the COVID_____________
Despite COVID, luxury real estate in Marbella and Mallorca register better sales last July than in the same month of 2019
Even though the sales have collapsed due to the COVID, the luxury real estate has resisted. Actually, there are enclaves such as Marbella or Mallorca where the number of transactions of prime properties has increased this July compared to the same month last year.
The biggest players of this part of the market are the German millionaires. They were amongst the few able to travel to Spain… Mostly in private jets, without the need for quarantine on their return.
The latest data from the National Institute of Statistics, confirms that the total purchase and sale of properties in May fell by 53.7% compared to the same month last year. This is the largest monthly decline since November 2013, which coincided with the hardest phase of the previous property crisis.
When home confinement was lifted, the prime residential market on the Costa del Sol and the Balearic Islands had a rude awakening. From the first moment, luxury real estate sales equalled or exceeded the records of a year earlier. And there was nothing to scare the potential buyers back then. This phenomenon has not been repeated in the rest of the property sector, not even in the luxury homes of the big cities.
Executive director of one of the biggest luxury real estate agencies in Marbella, confirms that the amazing results are accompanying them since the confinement was lifted. Although the months of July and August have never been the best, as owners prefer to put their homes up for rent during the summer, this July’s sales are better than those of the same month last year.
I can confirm that all the agencies on the Costa del Sol dedicated to luxury real estate are having “good sales”.
See, decide and buy
The “real buyers” are coming here with very clear ideas. They come ex-professionally to see houses, decide and close the deal. Importantly, all the buyers are foreigners.
The same happens in Mallorca. The foreign buyers who come during the pandemic go straight to the point: “SEE, DECIDE AND BUY”. They come on purpose to buy with the firm decision to finalise the purchase. That did not happen before.
The luxury real estate agencies have even been forced to hire more staff because of the increased activity this summer. They affirm this months have been crazy and don’t see any changes coming any time soon.
The best clients at the moment in Marbella and in Mallorca are wealthy Germans. Germany places very few obligations on its nationals who visit Spain. The exceptions are for those who, from now on, visit Catalonia, Aragon or Navarre.
Interestingly, the voracious British buyers are now little more than an anecdote. This has to do with the limitations imposed by the UK government on travel to Spain.
The prime residential market in large cities is more affected by the pandemic than the coastal enclaves with more tourist pull. This is the case of Madrid and Barcelona. Obviously, if potential buyers have difficulties in getting around, “it affects a lot”. And most buyers in the luxury real estate market are foreigners. Quarantines in buyers’ home countries result in fewer sales. At the moment, the buyers of this type of homes in the capital are Spanish or foreigners who already reside in the country.
Confinement has generated new housing search trends. Buyers now prefer to purchase residences in coastal locations.
It’s important to point out a likely reduction in prices. It is estimated that “a reduction in demand will lead to a readjustment of current levels, so that those owners who need to sell will have to reduce their expectations”.
The latest property report from CaixaBank Research suggests that prices could fall by between 6% and 9% in 2020-2021. Estate agents do not expect to return to pre-pandemic parameters until 2024. Prices are highly influenced by geography and type of housing.
Leopoldo Roca, a real estate agent, consultant, trainer and coach of professionals in the sector, recalls that the Spanish property market is enormous and “goes by neighbourhoods”. He stresses that, due to its characteristics, the prime residential segment on the Costa del Sol or the Balearic Islands is not a reflection of what is happening in the national market. “That is Mars, another planet”, he insisted.
It is a difficult time for all of us and we don’t know what the future holds for us. Nevertheless we all know that crisis is always an interesting time for opportunities and great deals. And luxury properties have surely shown that pandemic does not mean we should stop following our dreams and plans. So… DON’T WAIT TILL TOMORROW, DO IT TODAY.
A HOUSE IN MARBELLA? WHY NOT?