26 August, 2014

By VIVA Team

Marbella, Costa del Sol

The Costa del Sol property market is being driven by foreign buyers

Focusing on the current state of the Costa del Sol property market, a new study – just released by international real estate consultancy Aguirre Newman – confirms that throughout 2014 activity is being driven by foreign buyers, 90 per cent of whom, given that prices have been falling for 7 years, do not need to finance their purchase…

For Spain’s domestic market, however, it’s a different story, The Costa del Sol Property Market Report 2014 points out. A combination of high unemployment, economic uncertainty and Spanish banks’ unwillingness to approve mortgages continue to have a negative impact on local demand, where three-quarters of Spanish domestic buyers require finance to buy a house, and 85 per cent to purchase an apartment.

According to Aguirre Newman, of 266 new developments on the Coast, 33 were sold out last year, 207 are actively being sold, and 26 were halted. Of this total, 41 per cent were under the control of banks – including Spain’s ‘bad bank’, Sareb – a figure increasing to 54 per cent if those developments on hold were included.

The study also found that following a 3-year period during which no new developments had been released at all, four new build projects were launched in 2013.

The number of new homes for sale on the Costa del Sol dropped from 18,485 units in 2013, to 16,508 units this year – a fall of 18.4 per cent – and 29.7 per cent of new properties are unsold.

The report goes on to say that currently the average new house for sale on the Coast has 3 bedrooms, measures 279m2 and has a price tag of €393,520, while in the case of a new apartment, the average has 2 bedrooms, a size of 127m2 and costs €196,956. This equates to a drop in price since last year of, respectively, 9.7 per cent and 5.7 per cent.

Aguirre Newman predict that prices will continue their downward trend this year and next in less favourable locations, but will stabilise in prime, sought-after areas close to a good choice of amenities and services.