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Our Blog is designed to keep you up to date with developments of Spanish law and news.

You will also find some of our Top Tips for different areas of law to give you some key advice when requiring legal services in Spain. If you cannot find what you are looking for or would like to discuss a matter further, please contact us.

 

Update on the Costa del Sol Property Market – Winter 2021/2

Costa Blanca Property Prices

8 February 2022 | Tags: , , , ,

In the second of our two webinars, we looked at the Costa del Sol Property Market in the Winter of 2021/22.  We were joined in Sean Cannon, Sales Director at Panorama Marbella and Keith Spitalnick, owner of Target Property Spain.  They talked with Alex about the current state of the Costa del Sol market as well as what the future holds.

Panorama covers the area from from East Marbella to Estepona to Sierra Blanca.   The average price has increased greatly by 60%  Average prices were ranging from 200,000€ to 1.2M / 1.3M.  Now they are looking at 400k to 12 million.

The market has been lead by the reduction in transfer taxes being extended in Andalucia where the previous 10% tax has been reduced to 7%

After lockdown there has been a pent-up demand for lifestyle change. People have been able to manage their businesses from home and enjoy the weather and lifestyle in Spain.

Keith advised that Target had seen the average price over the last 20 sales rising to just below 500K.  For the area Target specialise in, east Marbella (Elviria) to Fuengirola / Mijas Costa, it is difficult to find homes under 200,000€

 

How did 2021 fare?

Panorama saw a growth in sales in the year from July 20/July 21 by 60% of sales volume. Due to lack of supply of stock, Agents need to be getting the best listings.

Target’s last 10 sales were to 8 different nationalities majority of whom were outside Europe.  Buyers are now a different age demographic with millennials from places like Hong King, Sydney, New York, New Zealand.  They are mainly digital nomads who can work online.

 

What nationalities in 2021?

Dominant nationality for 2021 which Target experienced in the first half did not include any UK Nationals.  The first half of the year was mainly to facilitate buyers looking for permanent homes. Second half was working with UK Nationals getting priorities sorted.

Sean advised that the first 6 months of 2021 was quiet at Panorama for UK Nationals and Irish clients with mainly Belgium, Swedens, Dutch and French buyers.

Did prices go up last year and this year?

Starting to see prices increase a little were Target and hopeful the situation stays under control.  Generally there is a lack of stock.  There are still opportunities, but these are fewer and far between and most are getting snapped up on the back of a video call. Since pandemic buying online has become normal, with Clients buying sight unseen.
Panorama had also seen a slow turn on price increases.  Market has been so hot for last year.  If stock is not there, and demand too, then this gives the seller an element of power.  They have had 5-6 properties with bidding wars.  Owners are not giving much discount.  The demand for properties beach side, or new Golden Mile are very high.  Vendors are staying put with pricing at 10/15% above asking price.  In the greater Marbella area more modern, fully furnished, kitted-out homes are in high demand. The area at Zagaleta finished and updated properties are selling fast with old houses staying on market longer.

Advice for Buyers

If you are looking in the Marbella area, Sean at Panorama advised the most important thing for buyers is the speed of transaction and level of demand.  Find a good lawyer and arrange the paperwork needed – NIE, bank account etc so there is no delay and can immediately buy.

Keith of Target advised that it used to be to do your research but now the Buyers have done all that research before.  Have all ducks lined up with Mortgage pre-approved.  Most agents now keeping their own listings and not sharing around, or on a multi-listing system and marketing to database.  If you are looking for a specific area ask the Agents who specialise in that area and get them to find you a pocket listing

Sean advised Buyers need to be able to be in a position to offer the asking price before they view.  They now have a waiting list of Clients who want a specific area and then its an open bid system.  There then maybe a second round for people bidding at the same time.  The Buyer offering the highest price walks away and this is in first time in 15 years that he has seen that happen.  It means the Seller can get the very best price for the property.  Some properties need to have a reasonable bid offered and then educate the buyer in the market and find a sensible middle ground and then move forward.
Alex advised that it’s important for foreign buyers to get their Powers of Attorney, NIE application and Mortgage in place.

Advice for Sellers

Target are certainly seeing that it is a sellers market at the moment so it’s important for them to make sure they are ready to sell.  Organise the next move, if staying in country and need to find another place to go and live in.  If you are getting an offer and its palatable take it.  Timing is important; the right buyer, with the right product at the same moment.
Paperwork, especially in Marbella, is so important said Sean following many issues with building licences. From sellers viewpoint speak with your Lawyer and find out any additional paperwork needed.  The current time frame for Marbella Townhall to put papers together is 6 – 8 weeks.  When you appoint a real estate agent, put the hard facts first and ask what is the price per square metre that they have sold in the last few months.  It’s really important to have a property specialist who knows the local area.
Alex confirmed that we advise Clients to look at an area first, find a specialist agent in that area, see the area at different times and then look for property.

Challenges for 2022 and what’s in store?

Lack of stock is definitely becoming an issue said Keith and that covers quite a finite area.  In previous years, when Clients reached their reach mid 70s / 80s they would think about selling. End of 2021 this has not been happening. Those Clients are no longer here, because they have no confidence to travel.  This is one of main reasons Target are devoid of stock
Sean at Panorama is very positive.  Panorama’s January figures had record sales, due in part to the continued reduced transfer tax in Andalucia.  He advised that lack of stock a bit of an issue.  However, there are new investors in the market building new properties and they still have plenty of inventory.

If you need help with your move to, or sale of your home on the Costa del Sol contact us at My Lawyer in Spain.

And if you are still not sure where to buy, also check our update on the Costa Blanca property market.

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Update on the Costa Blanca Property Market – Winter 2021/2

Costa Blanca Property Prices

29 January 2022 | Tags: , , ,

Alex Radford, Laura Albors Jover and Chari Rodriguez of the My Lawyer in Spain team were joined by Paul Payne of Masa International and Cameron Hamilton of Five Real Estate in an update of the Costa Blanca Property Market.

How did 2021 fare?

Cameron advised that overall it was a very positive year given covid uncertainty and travel restrictions.  Five Real Estate started with 3 branches and closed the year with 7.  They increased sales by 200% year on year in 2020/2021 with November being a record sales month (in line with Spanish data). Listings are also at a record level.

Paul concurred and said that whilst there had been a stop start there was a lot of interest. In second half of the year the market caught up and from summer time to December it was a tremendous year for sales.  People started to bringing plans forward plans to relocate to Spain.  Early indications are that the property market will continue to an even higher rate.

 

Where are the current hotspots?

Whole area of the Costa Blanca is proving to the a hotspot for both Agents.

  • Costa Blanca South is seeing high volume of sales transactions particularly
    • Ciudad Quesada ( either move full time or holiday home market)
    • Villa Martin has a very active market
    • San Pedro to a lesser degree with new homes on the beach
  • Costa Blanca North is seeing less volume but higher value/price sales, especially around the Javea area
  • New area behind Benidorm called Sierra Cortina with new homes is coming up too.

Paul mentioned there was a shift in spending.  Previously people were looking for small properties with a view to then upgrading on retirement.  People are now skipping that stage and buying higher value homes and villasespecially Brits.

 

 

What are prices doing?

Over the long-term data indicates that prices are on a slight upward trajectory but as far as 5 Real Estate have seen they are fairly static.  In 2020 the pandemic caused a drop in pricing due to reduced demand (travel & health).  As restrictions eased in 2021 and demand was on the rise, prices started to recover to pre-pandemic levels. with Sellers receiving 90+% of asking price.  The average sale price increased from 2020 to 2021 but that was in line with their expansion into the NCB where property prices are significantly higher.  Looking forward certain economic factors may influence prices i.e. increase in inflation and interest rates. What may impact the resale market is the costs of building materials and labour costs have pushed up prices of new homes.

Paul of Masa International advised that key ready stock is very low due to demand and limited move into homes.  Developers are now paying more for land and materials which has caused a definite increase in property prices.  There is now a gap between new and resale prices.  Clients are looking for modern homes. with 90% chasing 10% of what is available.

 

Who are the Buyers?

    UK Nationals remain the strongest buyer nationality buying in the area although there was a slight drop off due to the pandemic, Brexit and non-resident buyer.  However this did recover last year.  Many UK Nationals are still trying to circumnavigate rules.  One area impacting UK Nationals, according to the data, is non-resident second-home buyers (post-Brexit).  Due to the GBP strengthening at 6% as well as low interest rates for borrowing, the period between January 201 and 2022 has been a great time for people to buy.

    There has also been an increase in other European buyers including German, French and Scandinavian buyers

    In Q3 of last year for the first time the UK Nationals were the second biggest group of foreign buyers, behind the Germans.

    In Masa’s opinion, traditionally over last 5 or 6 years, Belgium buyers have been the biggest and taken hold of market as well as Scandinavian buyers

     

    Advice to Buyers and Sellers

    • Buyers: Come prepared with your brief
    • Have clear boundaries and omfortable price range
    • work out financials   

    Paul said new properties offer a very limited acceptance of reduction in offers. Sellers know its a good market on resales but something can be worked on.  Sometimes for the turn key properties you can negotiate to include certain items.  Most importantly is currency – take advantage of the stronger GBP.  As 4 to 6 weeks is a natural time from offer to completion the market is moving quickly.  In the early part of 2022 there were bargains to be had but prices are going up. 

    • Sellers: there are only 2 things a seller can influence and that is price and presentation.
    • Ensure your property is presented well, uncluttered and priced according to the market. 
    • Think about your banding on pricing as the higher you go naturally less people available in the market 
    • Market your property with a proactive estate agent who will market your property extensively
    • Buyers: Do research and make sure to analyse comparable property prices
    • Watch out for changes in tax i.e. property transfer tax (associated costs to buying)

     

    Alex Radford also commented about the costs of purchase in the Costa Blanca as on a new build the buyer has to pay VAT at 10% + 1.5% stamp duty + Legal fees.  He recommended allowing for 14% for brand new property on top of purchase price.  On a resale, Transfer Tax is payable at 10% so fees around 13%

    If you are apply for a mortgage in Spain contact an independent mortgage broker beforehand to find out how much you can borrow and need to add on top of the expenses.  Generally banks are lending around 60/75% typically a lend, which means you would need a 40% deposit, plus 14% costs so to put down 54% of the purchase price.

    Where possible, do visit the area at different times of year to see differences in market before you buy

    Impact of Brexit means that unless the buyer becomes a resident, they are limited to 90 days in 180 days.  If they wish to become a resident, they can obtain either a Non Lucrative Visa (i.e. not work in Spain), or apply for a Golden Visa and invest 500,000€ in a property/business in their own name.  This amount needs to be mortgage free, so they can live and work in Spain.

    For more information about VISAs visit our Youtube channel

     

    Challenges for 2022 and what’s in store?

    On a positive side, Cameron said “as international geographic mobility recovers and the level of confidence regarding the control of the health situation increases, foreign demand will continue to grow, contributing to maintaining high levels of residential real estate activity.”

    • Less covid restrictions and increased travel (Feb 11th no more day 2 testing for fully vaccinated)
    • Spain and UK leading the way for a buoyant 2022
    • As inflation rises the cost of raw materials will rise which may cause the cost of new build properties to go up
    • Demand for modern homes means there are not such long competition times.

     

    Summing Up

    Paul Payne from Masa International said the Costa Blanca offers a well balanced market.  The resale sellers are as usually having a built-in anticipation of any offer although they are smaller than before.  There are plenty of buyers in the market.  Prices are increasing steadily.  However, as a word of warning, don’t come to Spain to buy a property to make money; it’s more about lifestyle choice.

    Cameron Hamilton of 5 Real Estate comments that at the tale end of last year, the volumes of transaction skyrocketed and this evened out during the lockdowns.  Properties are now priced well and according to the market rates and if presented well, they do sell.  Pretty positive market.

     

    Join our next session to hear about the Property Market on the Costa del Sol

    If you need help moving to Spain contact us

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    New Spanish Tax System from 2022

    New Tax System in Spain

    1 October 2021 | Tags: , , , ,

    From 2022, a new way of calculating taxes will affect all resales, donations and inheritances in Spain. If you are planning to buy a house in the near future or will receive any gift or inheritance in Spain, check your taxes beforehand to budget the transaction properly.

    Read more...

    Divorced Parents – who decides on children’s vaccination?

    Family Law Children vaccination

    27 September 2021 | Tags: , ,

    We look at family law and the situation with parents who disagree over their children being vaccinated.

    Read more...

    Meet MLS in the Autumn

    Free Seminar about moving to Spain

    22 September 2021 | Tags: , , , , ,

    My Lawyer in Spain team are excited to be taking part in various in-person events both in the UK (Birmingham) and Spain (Costa Blanca and Costa del Sol) 

    Read more...

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