Last
year Banks hardly thought about attending their loyal clients, as money could
be earned more quickly with stocks. Banks and Investment companies got the
money their investors lost and they have to be blamed in part for this Crash.
Banks and analysts should really have foreseen, that such a Boom could not
work out well. Of course it is clear, that with such high profits at the beginning,
Banks now note a profit loss of 70 and 80%. Moreover the confidence in the
stock market has disappeared, resulting in dismissals of many bank clerks
as well as in other sections.
Investors understand, that they now have to count
with losses, possibly also for those, who can wait until it goes up again
– knowing as well, that it can take time.
The consequences are, that Banks now start to reinforce their dedication to
their “normal activities”, such as Customer service and Credit-business,
as well as in the real-estate sector, especially in land. Investors now start
again to live in a smaller way.
According to a communication of the „Banco de España“, expansion is not expected in all areas of Spain, but it is for the whole areas around the coast. Especially for the Costa del Sol further growth is being predicted.
Smaller and bigger investors buy many properties in the very first stage “off plan”, as they expect prices to increase during construction up to 20% and more. It has become something very common by the promoters, in order to construct faster and cost covering. Also for customers this is something very interesting. Supposing the client finances 70% of the total price and gets a benefit of 20% from the total amount over the 30% inset: gaining this way 20%, which means that 30% inset make a profit of 20% = more than 66%.
The question is, if it will keep going this way. Everything indicates that at least for a certain period of time this increase at the Costa del Sol will not slow down. Not only because people start to invest in “real equities” after this bad experience in the stock market, but also because the European “Baby Boomers” (born in the post-war period), have at their disposal enormous amounts from Pensions or Inheritances, which have to be invested. There is nothing better than combining investment with pleasure – a property in Marbella – a hideaway to enjoy peace and relaxation.
The
biggest buyer in the last 12 months was the British, who mainly preferred
less expensive properties. However, they also represented a big percentage
in the middle- and high-priced domain. Spanish people from Cordoba, Seville,
Madrid and the Bask-country usually look for properties near the beach. But
these should not be more expensive than 200.000 Euros. At present there are
hardly any plots left in such areas around Marbella, Estepona or Málaga.
Increased prices for land and construction don’t allow 90% of the Spanish
promoters to offer at these prices. Accordingly more and more plots on the
hill side start to get developed – properties which are usually preferred
by the North-European customers, who, however, also purchase Beachside-properties
over 300.000 Euros.
This is why the future is in the mountains and Spanish promoters need to do some rethinking. As now the residential tourism has become the main-customer and the demand is unmistakeable going towards quality-properties. This refers to the North-Europeans, who usually come around the autumn and winter season, when the climate is its best and stay for approximately 1 – 3 month. That is why we have so many Spanish promoters, who we advice from the designing of the promotion to the completion and key-delivery, as we know the needs of these demanding customers very well. Nevertheless the German speaking market will be determinative over the next 3 – 5 years for the Future.
Some clients will probably ask themselves, why there is such a high offer of Luxury villas on the Costa del Sol. Many villas are actually not for sale, but are only on offer with the though in mind:” Lets see. If I can get this or that price, why not sell it.” Another reason is, that from a certain price-range onwards, customers are not willing to compromise, but on the other hand, don’t want to built either. So, this client yearns for his dream-home for weeks, months and sometimes even for years. Further reasons are as well, that properties at certain price-ranges have to have a suitable furnishing and design. This includes not only a certain size of built-area but also a minimum of plot-size. Because a client who is willing to spend 2 Million Euros or more for a home, wants to have a large driveway, as well as 3.000 m2 or more land at his disposal – properties which are high in demand, are apartments up to 300.00 Euro or those in the most prestigious areas - with the highest quality fittings. Unfortunately there area hardly any offers like this left. But, who is willing to search, will find.
The real-estate market on the Costa del Sol depends, of course, also on the progress of the international economy, in spite of the fact that property give security. Yet, prices may well keep rising in the next 12 months, even if not so dramatically as in the last 4 years. One or another property will notice a sudden price-drop, especially those where the price is not in relation with what is offered. Generally speaking, we are very optimistic and not only because Marbella is one of the securest places in the world.
WHY MARBELLA: From all these nice places with fantastic climate in the world, Marbella is the most sheltered one. In Florida you have hurricanes, devastations and floods; California has landslides, strong earthquakes and violence. Asia has besides the usual climatic catastrophes, a very unstable political situation and, nevertheless, Marbella is away from possible targets of warlike actions, as for example in Central Europe. All this is something Marbella has not got.
For the year 2004 we expect a price-increase of about 15% for those properties in good locations in and around Marbella, if the international market becomes stable again. Reason for this is a lack of good plots in the Marbella area. There is a high demand especially for prestigious areas, and those, where prices did not yet reach the limit. For extravagant properties there are no limits. The most remarkable price-increase will be in the plot sector, and in determined locations prices might as well rise way above the 15%. Investors, who are not in a hurry, are better off buying large estates inland, as the future is there. Assuming, that one can be patient for about 5-10 years, as it is to expect, that ordinary countryside will be classified as building land, as the Costa del Sol is expanding into all directions.
