Marbella Real Estate Market Report 2023
01 Jan 2024 | News and UpdatesThe year 2023 started with a lot of uncertainties, the energy crisis with its consequent increases in the prices of raw materials, as well as the increase in interest rates to control inflation were aspects that worried the Real Estate sector at the beginning, as we already announced in the Marbella Real Estate Market Report 2022.
As we always do, we will start this report by commenting on the macroeconomic variables which have undoubtedly stressed the monitoring of the year.
THE ENERGY CRISIS
Throughout the year 2023 the energy crisis stabilised and although prices increased considerably they finally seemed to come under control in some respects. For example, fuels started to stabilise in 2023 after the withdrawal of the €0.20 incentive on diesel on 1 January 2023. Although the increase in raw material costs has been controlled and in many cases decreased, they have not recovered to previous levels, confirming a general rise in the cost of living. This rise also had a strong impact on construction costs, which resulted in a significant increase in the purchase and sale prices of new buildings.
INFLATION
The rise in inflation due to the general increase in the cost of living is a matter of concern for the sector. One of the immediate consequences of inflation is the increase in the interest rates of the ECB, which started to increase them last July 2022, reaching a ceiling of 4.5% in September 2023. Given this new situation and taking into account that until 2022 the price of money was zero, it is not surprising that the sector is concerned.
WHY DOES THE REAL ESTATE MARKET IN MARBELLA REMAIN SOLID?
Despite such an unfavourable outlook and contrary to general expectations, the market in Marbella and the surrounding area has continued to develop with the same consistency as before. One of the reasons for this is that most buyers are investing with their own funds and with the objective of investing their capital in a secure asset, i.e. a property in Marbella and its surroundings. Buying with their own funds allows them to formalise their investment and protect their capital against rising inflation.
Marbella is a well-established investment destination
If we add to this, climate, services, quality of life and the fact that many of the people who invest in these properties also enjoy them by occupying them for several months of the year or even working remotely from Marbella, we can understand why we are still on an upward trend. Of course, we cannot forget that Marbella is ‘small’ and the demand is ‘big’, i.e. European in general without forgetting citizens from the rest of the world.
THE CUSTOMER
Both buyers and sellers continue to meet a profile between 40 and 70 years of age. They are looking for quality services in general, health, education and leisure. Maintains a high or very high economic profile. They reside in the area for several months of the year, which means that Marbella is losing the seasonality typical of holiday towns and becoming an area to live in all year round. The model of city continues to be the preferred one for clients since the postcovid, a garden city where plants and open spaces predominate.
In short, the positive evolution of the area continues to be confirmed, which is not only subject to a specific economy but to international demand as a whole.
MARBELLA REAL ESTATE MARKET REPORT 2023, CONCLUSIONS
2023 has undoubtedly been a year in which the evolution of the real estate market has been observed with concern. After a year full of doubts, it has finally been possible to observe that the real estate market in Marbella has continued its upward trend in a fairly constant and solid manner. This is due to the fact that clients from all over Europe have decided to invest in the region and in the Marbella brand, thanks to all the qualities we have already mentioned.
Is this a good time to sell? Of course, as long as it is an investment, this is a good time to sell. It should not be forgotten that according to the available records we are at record highs, so liquidating the investment at this time is advisable as long as it is an investment.
From an investor’s point of view, the Marbella market is very dynamic and although there is a lot of competition there are always opportunities that can be seized with liquidity.
Obviously if it is your main property and you need to sell to buy again at the same time, given the upward trend of the market, you may need to prepare a supplement for the new purchase.
From our experience we can confirm that price rises in general are easing, but due to sustained demand they are still rising.
Is it a good time to buy? At the moment Marbella is a very dynamic market. There is a lot of turnover, properties change hands easily. On the other hand, buyers are coming from other countries willing to pay for the quality of life in the area and this is a sure value.
There is little supply of newly built properties and there is not too much supply of second hand properties either, which, together with the influx of buyers who do not need financing and a constant and international demand, we can say that for the moment we do not foresee a downturn in the market.
Although it is true that the price increase will slow down, it will be maintained by 2024. Therefore, we believe that buying at this time is still interesting.
In short, we end 2023 with a year in which Marbella has been able to continue evolving towards a long-term sustainable city model, and we begin 2024 with the hope that we will be able to start controlling inflation and that this will not be a problem in the long term.
Article by Brice Benarroch Mennessons
01 Jan 2024