Many of you have been asking about forecasts for the property market in Spain. The situation is currently very dynamic, this is probably due to several factors:
1) Clients want to hedge against the inflation expected by many, they invest in land and real estate.
2) During the pandemic, many people realised that postponing their dreams until a few years from now and planning their whole life doesn’t always work out. They want to move from their dreams to realising their goals, they buy a property cheaper than originally planned, but decide to buy today and want to use it.
3) The current political situation makes many Poles choose to buy abroad, preferring to geographically diversify their investment portfolio.
4) Most of Europe’s wealthy realise that for the next two years they will not be travelling to beautiful but distant countries where they do not have quality medical care. When looking for an investment they also think about securing a place to relax and the Costa del Sol – Marbella meets all expectations.
5) Home-office shift – I am convinced that teleworking will drive many Europeans to work remotely from home in Spain, where they will be able to enjoy a quality of life that they do not have in their own country. I assume that remote working will remain a popular and preferred form of service provision even after the acute phase of the pandemic is over. This will probably have an impact in the short term on the rental market and in the next two to three years on the sales market.
What will 2021 be like? What do we expect in 2021?
We know that we will have to wait a long time for a return to normality. Until the universal vaccine has done its job and air transport has recovered, the number of international investors will remain limited.
In Andalusia, the current relatively mild restrictions mean that we are all functioning fairly normally. Businesses have gone back to work, schools are open from September 2020 and only life is a little slower. To the curfew, most have already got used to it. Restaurants are operating and their terraces even invite us for lunch or an early dinner. We can function normally with relatively low increases in new infections. We hope that the summer season will be better than 2020, although we realise that air links will still be largely reduced. It will take at least another year, if not more, for tourism to return to pre-2020 levels.
Most property owners, come to the Costa del Sol for the sun, sea, beaches, clean air, good food, golf courses. All of this is available from June 2020. Visitors from Spain or abroad feel virtually no restrictions except perhaps curfews and closed clubs and discos and no nightlife.
Despite the fact that many hotels are closed, we are seeing a lot of interest in rental properties between June and mid-September. Numerous airlines have already decided to sell tickets for the 2021 summer season.
The clients who are currently coming to us are those who are determined to buy a property. No one flies a plane and comes to the Costa del Sol in this situation if they are not seriously interested in buying. In addition, PCR tests have to be done, which costs both time and money.
High-quality properties that have a ‘location, location, location’ keep prices unchanged.
Sometimes there are situations, which have never happened in the past, that there are two buyers for one property and there is a price outbidding. The timing of the buyer’s decision then becomes important. The seller wants to sell quickly and often goes straight to the notarised contract and not, as has been the case in recent years, when a reservation contract was signed first and then a so-called private contract with a 10% price deposit.
Properties further away from the sea or without a sea view, in slightly less attractive locations had to accept a price adjustment (from 5% to 10% or even 15% depending on the area and property).
House and flat prices are expected to remain stable this year with moderate falls in property prices in poorer locations. This state of affairs will continue at least until the health and economic situation allows for a return to ‘normal’ global business activity, which is likely to occur in 2022.
Written for HolaPolacos Magazine – article appeared in the April 2021 issue.
