Reapperance of Cranes in Marbella Underpins Spanish Property Market Recovery

5/11/2014 – El Confidencial

Marbella was the first to fall into crisis and will be the first to plant a flag on the Spanish real estate recovery map. The city has become an oasis inside the diverse market. It ran out of the entire stock and prices there hit the bottom, two factors that cheered the market up. In the last months, cranes returned to the building sites, new show houses appeared, and off-plan sales and building specifications reports are being prepared again.

‘We are talking about Marbella. Not about the adjoining areas where the situation is totally different. In Marbella, the stock has been practically absorbed and demand for construction is back’, explains Dario Fernandez Palacios, new Land, Town Planning and Residential director at JLL. ‘Marbella got into troubles in 2006, almost two years before the rest of tourist-stormed cities and large metropolises like Madrid and Barcelona, because its prices reached an incredible cap and homes stopped selling’, he precises.

‘The truth is that sales have revived thanks to investors who reckon the prices have already gone low enough to establish a balance on the market. The affluent are poaching bargains and they are finding them’, say sources from Foro Consultores.

However, some experts call for cautiousness. ‘The first months of the year registered an increased purchasing activity but in the final stretch it lost the impulse’, pictures Miguel Angel Bilbao, broker at RE/MAX Top Marbella. Also, he warned about getting into an euphoric mood.

As per the data of the Ministry of Public Works, Marbella ranks the seventh in the top H1 2014 sales with 2.019 units sold, outrun by such cities as Madrid, Barcelona, Valencia, Sevilla, Zaragoza and just behind Torrevieja. The figures constitute the proof that Marbella came back on the map of the real estate investors.

The first quarter of 2014 was the best in terms of sales since 2007, and the first half numbers nearly equalled to the entirety 2011. That year, 2.250 dwellings changed hands, only 200 more than during H1 2014.

In opinion of Inigo Molina, Andalusia-based director of CBRE, ‘Marbella from the last months is a whole new ballgame. Since the end of 2013, we have been observing a turn in the trend: sales geared up and the time necessary for sale shortened’. He believes the cranes could return to the city due to disappearance of majority of the stock.

His view is shared by Estepona Gilmar‘s head Setareh Mohregi who added that ‘developers had started a dozen of new housing developments’. As she explained, ‘behind these construction ventures there are local firms that could afford saving land for better times. Now, seeing the lack of stock and the new buyers’ appetite, they have decided to bring it out to the market and develop’.

‘Foreign funds and investors support local developers by taking a part of the risk but also of the profits’, claims Inigo Molina. ‘And they are not the vulture funds’, he clarifies, ‘as the plots prices have not been slashed due to the stock surplus’.

‘There are two components marking a change in the market: developers willing to finish buidings whose construction was halted and others who are looking for land. In both cases, they eye places plainly defined as excellently located and with solvent demand’, informs Foro Consultores.

‘When it comes to prices, specialists prefer not to give numbers. ‘We cannot generalize. The value depends on the product type and its location’, points out Dario Fernandez. Miguel Angel Bilbao sees eye in eye with him and adds that ‘although there have been some minor price rebounds, they are not real and they do not apply to all properties’.

Main & Second Residence

New construction works were halted in 2006-2007, but now they are being retaken. Of what kind? ‘There are main residence projects at more or less affordable prices, around €200.000, but also more expensive dwellings are being built. Talking of second homes, we could mention developments in the Milla de Oro area, intended for foreign buyers like the Russian or the Scandinavian, priced at more than a million of euros’, says Dario Fernandez.

Miguel Angel Bilbao identifies three zones especially desired by purchasers: Nueva Andalucia, Elviria and the Milla de Oro. For example, one of the ongoing projects, ‘Residencial Albatros’, is found within the Nueva Andalucia zone, and another, first-residence ‘Tylor Wimpey’, in the Elviria area.

Before the recession hit, many investors and developers purchased plots along the Principe Hohenlohe avenue in the areas of Milla de Oro and Sierra Blanca. ‘Marbella for Sale’ traded by Diamond Beach, a high-end complex in the heart of the Milla de Oro, or the ‘Feel the Marbella Style’ housing development are only few examples of projects being implemented on these pieces of land.

Little Stock For Sale

Together with the new product, also few projects – some in possession of banks – are being warmly welcomed by the market. For instance, ‘La Morera’, a luxury housing development commercialized by Gilmar and located inside the La Reserva de Los Monteros urbanization, a five-minute walk from the center of Marbella.

Its dwellings with a swimming pool, a garage and a storage room included in the price, start from €913.500 and end at €2.201.846. The homes’ areas range from 283 to 570 square meters metros, offering two to four bedrooms.

‘It is a high-end product at the front line beach in an unbeatable location. The price perfectly matches the value for money’, remarks Setareh Mohregi. ‘Principal candidates for the 45 homes –now only 25 available left – are foreigners, mostly Russians, Northern Europeans and Arabs. They are looking for a nice climate spot to live in when they retire’, she explains.

‘REO property has been thinned out. If that had not happened, it would be impossible to start new construction homes at good prices’, says Mr. Fernandez. ‘Banking property has practically disappeared from Marbella’, supports Miguel Angel Bilbao. To give an example, Sabadell sells some detached and terraced houses for prices oscillating between €490.000 and €750.000.


Original article: El Confidencial (by Elena Sanz)

Translation: AURA REE