2022 proved to be the best year for the Spanish property market in a dozen years. Despite lower sales growth in the first months of 2023, experts predict that the luxury property segment in Spain and the Costa del Sol will continue to grow.
What was 2022 like for the Spanish property market?
Last year, Spain recorded the highest number of property transactions in more than 13 years. There were more than 646,000 buy-to-let transactions, an increase of 14.5% year-on-year. At the same time, 2022 can be divided into two parts: the first half of the year was very favourable, while the second half of the year saw some cooling of the market. This ultimately resulted in an excellent performance for the whole of 2022.
Foreign buyers in 2022 accounted for 13.75% of all property sales in Spain, an increase of 2.95% on 2021 and the tenth consecutive year with a market share above 10%. Among foreign buyers, the British were again the most active in 2022 (11.07%), ahead of the Germans (9.47%) and the French (6.97%). It is worth highlighting the growing share of investors from Poland, which increased by 1.48 percentage points to 3.35% of foreign buyers throughout 2022. Thus, Poles were among the TOP10 foreign buyers of property in Spain.
More than 10% of foreign buyers will spend in 2022. 500,000 euros or more on property in Spain, which, according to the Spanish Land Registry, is the highest percentage since it began tracking this data in 2012. More than a third of all properties worth more than €500,000 that were purchased by foreign buyers in 2022 were located in the Andalusia region.
Andalusia and Marbella attract foreign investors
In the Andalusia region, foreign buyers accounted for 15% of all property transactions in 2022, an increase of 3.5 percentage points compared to 2021. Among foreigners, Britons made the most purchases, recording 16.31% of the total number of transactions. In the province of Malaga (Costa del Sol), foreigners accounted for more than a third (33.5%) of residential property sales in 2022. This represents a significant increase of up to 6.12 percentage points on the previous year.
Marbella is no longer just a destination for golfers or tourists looking for a place with a warm climate for a holiday. Based on the data collected by statistical agencies and the information contained in the Knight Frank report on global luxury residences, it can be firmly established that 2022 represented the moment of consolidation for Marbella as the location of choice for luxury property investors in Europe.
When various cities in northern and central Europe began to show signs of stagnation or recession as a result of Russia’s invasion of Ukraine and the rise in inflation and interest rates, Marbella proved more resilient. The city continues to consolidate its position as one of the favourite destinations not only for those seeking holiday residences, but also for those who wish to settle there permanently – enjoying the advantages offered by the climate of the southern Spanish coast.
Marbella is gaining popularity among northern European buyers looking around for a second home in an era of sustainable working patterns. Indeed, it is one of the most developed markets on the Old Continent, with easy access from Malaga and Gibraltar airports and providing a range of amenities and sunshine 320 days a year.
According to Knight Frank experts, Marbella’s residential market is booming as internationally recognised luxury brands – such as Fendi, Dolce Gabbana, Lamborghini and Four Seasons – are planning and executing new developments in the area. No doubt we will soon see many more leading brands further strengthening Marbella’s position. Feedback from Knight Frank clients confirms that it is not only the individual design and décor that counts, and that the main motivations for buying a residence are the additional services and amenities available, such as sports and wellness facilities, concierge services or management.
Market outlook for 2023.
As a result of the good results achieved by the Spanish property market in the first few months, the outlook for 2023 is optimistic, according to Knight Frank experts. It is true that a lower rate of purchase transactions is visible, but for the Costa del Sol and Marbella, the market situation promises to be positive, driven by factors such as:
- Cooling the property market and bringing prices in line with economic realities, with the exception of the most desirable locations, e.g. properties in the first line of the sea.
- First signs of a gradual shift from a ‘seller’s market’ to a ‘buyer’s market’.
- Consolidation of the real estate market in Marbella as a major luxury destination for investors in Europe.
- A significant increase in the number of developers looking for secondary market properties for refurbishment.
- Increasing demand for house building plots and a shortage of such land in key locations.
- Steady increase in the number of buyers from Central Europe (Poles, Slovaks, Hungarians, Czechs).
- Growing presence of international luxury brands investing in original projects in the Marbella region.
- Tax changes in Andalusia, highlighting the new law on start-ups, which, thanks to tax incentives, will certainly attract creative workers and digital nomads, for whom Málaga may be one of the preferred destinations.
