Impact of COVID-19 on Luxury Property Prices in Spain
The COVID-19 pandemic has had a significant impact on the luxury property market in Spain, particularly in the Costa del Sol region. According to a report by the luxury real estate agency, Barnes, prices have fallen by up to 20%. However, the agency predicts a boost in the market with the reopening of Spanish borders and the influx of foreigners and expats.
Factors Influencing Price Decreases
Barnes suggests that the extent of price decreases will depend on the liquidity needs of property owners. In the super luxury homes segment, where prices start at five million euros, no price variations are expected. The average price in the luxury property market in the Costa del Sol currently stands at 7,000 euros per m2, creating a favourable environment for potential buyers.
Role of International Demand in the Luxury Property Market
The international demand, particularly from foreigners and expats planning to buy property in the Costa del Sol, will play a crucial role in the coming weeks. The region, which attracts 90% of its demand from foreign buyers, is particularly popular among expats from the United Kingdom, France, Germany, Belgium, Italy, Switzerland, Russia and Scandinavian countries.
Recovery of the Luxury Property Market
The managing partners of the Barnes office in Marbella, Jeremy Lauwers and Marie-Laurence Van de Berg, are optimistic about the recovery of the luxury property market in the region. They believe that the reopening of Malaga airport and the arrival of the summer months will reactivate the market and property prices will recover gradually.
Engel & Völkers’ Confidence in the Costa del Sol’s Potential
Engel & Völkers, a consultancy firm, has also expressed confidence in the Costa del Sol and Marbella, in particular. They have observed a high concentration of demand in the region and expect price stability to prevail, except in cases where the owner wants to accelerate the sale.
Changing Demographics of Engel & Völkers’ Clients in Marbella
Traditionally, Engel & Völkers’ clients in Marbella have been expats with high purchasing power. However, post-pandemic, the client base has shifted to a 50-50 split between international and national clients, with a high demand from residents from northern Spain.
Preferred Type of Housing for Buyers in the Costa del Sol
The preferred type of housing for buyers in the Costa del Sol remains largely unchanged. Local clients prefer larger properties with private outdoor spaces, while international clients lean towards residing in Marbella in case of another lockdown situation.
Increasing Demand for Luxury Properties in Malaga
In Malaga, there is an increasing demand for single-family villas with gardens and pools, priced around 3,250 euros/m2. The percentage of foreign buyers in Malaga remains at 65% compared to 35% for national buyers.
