Marbella: A Rising Star in Luxury Real Estate
In recent years, Marbella has emerged as a preferred destination for luxury home purchases, a trend that has accelerated since the pandemic. The luxury home sales and purchases have become a significant part of the overall real estate market. This observation, initially based on anecdotal evidence, has been confirmed by a deep dive into the numbers.
Spain’s Luxury Market Experiences Boom
Spain’s luxury real estate market has seen considerable growth, with high-net-worth individuals investing more in this segment. The country’s luxury real estate prices have increased by 10-20% in the past two years. Transactions for homes over 3 million euros increased by 55% in 2022 over 2021, with over 8,000 transactions registered last year.
Luxury Purchases Concentrated in Major Centres
The growth in the luxury market has not been uniform across the country. Luxury purchases have been concentrated in a few major centres, such as Barcelona, Madrid, the Balearic Islands and Malaga province.
Málaga Leads the Luxury Real Estate Market
Málaga is at the forefront of the luxury real estate market, with 2,500 homes for sale above 3 million euros, representing 34% of total luxury home sales in Spain. Most of these high-end homes are located in the so-called “golden triangle”, formed by Benahavís, Estepona and Marbella.
Impact on Marbella’s Real Estate Prices
The rise in luxury housing has significantly impacted real estate prices in Marbella. Across all categories, prices in Marbella rose by about 15% between June 2022 and June 2023. The average asking price reached 4,461 euros per square metre in December, more than double what it was 10 years ago.
Factors Influencing Marbella’s Property Market
A significant part of the rise in prices in Marbella is due to the paralysis that exists with regard to zoning. Marbella hasn’t had a zoning bylaw for over a decade now, causing a shortage of available housing. However, Marbella’s attractiveness as a destination for high-net-worth individuals also contributes to the price increases.
Implications for the General Public
The growth in the luxury market in Marbella and the Costa del Sol is generally a good thing, but it does have its drawbacks. Price rises in both rental and purchase prices make housing less affordable to those who aren’t wealthy. On the other hand, Marbella, being a destination for luxury seekers, provides work as well as improvements to the local infrastructure that benefits everyone.
Future Outlook
Will the trend continue, or will sales and prices fall? That is the question on many people’s minds. The short answer is: don’t panic. It’s true that there has been a slowdown in 2023, but the lack of housing stock is greater than the drop in sales. The truth is we need more housing.
Conclusion: A Sustainable Growth
What is happening in Marbella is not a bubble. Prices remain 22% below 2007 highs in the Costa del Sol. The restoration of a functioning zoning regime in Marbella will also ease the upward pressure over the course of the next couple of years. Marbella and the so-called golden triangle are definitely experiencing the virtuous circle of an influx of luxury buyers, along with improved infrastructure from growing tax revenues.
