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Marbella Property Market Analysis 2023: A Snapshot of Costa Del Sol's Resilient Luxury Real Estate Sector

Marbella, the epitome of international prestige, continues to captivate established and emerging affluent individuals worldwide. Renowned for its allure, the city has become more than a vacation destination; it now serves as a second or third "first home" for those seeking year-round residence in a luxurious setting.



Key Market Indicators Reflect Unprecedented Growth

The property market in Costa Del Sol, particularly in the coveted "Golden Triangle" of Marbella, Estepona, and Benahavís, experienced a historic sales boom in 2022, setting records with a 20% year-on-year increase in sales volume. This trend is echoed nationwide, with Spain's overall real estate investment reaching an unprecedented €17.5 billion, a figure never seen before.


In 2023, the sale of luxury properties in Marbella is even stronger, with reported increases of up to 20% in the highest-end market segment. Similar trends are observed in prime real estate markets in London, Dubai, and Miami.


Supply Shortage and Increased Prices

The shortage of available properties in Marbella is evident, with Idealista reporting an 8.83% decrease in the stock of properties for sale from the first quarter of 2022 to the first quarter of 2023. This scarcity, coupled with rising demand, has led to an inevitable increase in asking and selling prices.


The primary reason for the reduced number of project approvals in Marbella is the scarcity of fully-zoned building land, a challenge dating back a decade. Despite the anticipation of new development land with the approval of the new general zoning plan in 2024, a continued shortage of properties is expected for the next three to four years.


Continued Surge in Property Prices

Asking prices in all categories have surged by an average of 15% between June 2022 and June 2023, reaching a record high of €4,233/m2. This represents a doubling of the average asking price per m2 over the past decade. Although these figures reflect asking prices rather than real sales prices, they offer valuable insight into the rising real estate prices in Marbella.


Foreign Buyers Dominate the Market

While Spanish buyers remain a foundation of the market, at least 90% of properties priced over €2 million are sold to foreigners. In the province of Málaga, 34% of home transactions involve foreign buyers, with the British leading the pack at 16%, followed by the Swedish and the Dutch at 12% and 8%, respectively. The surge in the Swedish and Norwegian markets is noteworthy, and an increase in U.S. citizens purchasing property is observed encouraged by the strengthened dollar against the euro.


Booming Local Economy and Infrastructure Development

The influx of foreigners has positively impacted the service and hospitality industries, contributing to Marbella's lowest unemployment rates in 14 years. The thriving economy is reflected in the municipal budget for 2023, reaching a historic high of €333 million.


Numerous projects are underway to enhance infrastructure and the overall appeal of the region, showcasing Marbella's commitment to continuous improvement.


The Anticipated New General Zoning Plan of Marbella

Marbella's expansion necessitates zoned land, and the mayor has announced plans to re-designate 12 million square meters of rural land as urban in the new general zoning plan expected to be approved in 2024. The plan includes improvements and developments in various areas, from Nueva Andalucía to the Golden Mile and Nagüeles, highlighting the city's commitment to innovation and technology.


Optimism and Confidence in Marbella's Future

Despite global challenges, confidence in Marbella's future is at an all-time high. The city is well-positioned to navigate financial uncertainties, thanks to the credibility and wealth generated by its residents, tourists, and investors. With a successful 11-year market run, healthy demand, year-round activity, and competitive prices compared to other luxury destinations, Marbella continues to solidify its reputation as a world-class resort city.


Key Takeaways for 2023:

  1. Marbella's property market has experienced a remarkable surge in demand, especially in the luxury segment, maintaining its reputation as a world-class resort city.

  2. The market is expected to sustain healthy demand, albeit with a gentle deceleration towards more normal levels.

  3. Year-round activity has become the norm, with Marbella evolving into a vibrant hub that attracts major investors and residents.

  4. Despite rising interest rates, the luxury property segment remains largely unaffected, with approximately 90% of sales made without bank financing.

  5. Marbella's property market success extends to neighbouring areas like Estepona and Benahavís, contributing to a solid market along the Costa del Sol.

  6. Marbella's lifestyle destination status is stronger than ever, supported by a period of unprecedented growth, reinforcing its appeal as one of Europe's most attractive places for quality living and property investment.


In a previous blog we referenced the strength of investing in Spain, and you can learn a little more about how we at Alexander Carmine Estates can support you on this journey here.


Please do reach out if you would like a chat


Danny


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