Ricky Bache discusses with Peter Rosen the changing face of the Marbella property market, and its exciting potential for the future.
Peter Rosen is, together with his wife, Anna-Lena Rosen, owner of Nordica Sales & Rentals, one of the leading real estate agencies in the Marbella area, specialising in Nueva Andalucia.
Ricky: Peter, having spent over 25 years in the real estate business in the South of Spain, I am sure that you have seen the market evolve over these past years. How do you see the current situation?
Peter: Marbella has finally reached a stage of maturity that offers a solid investment for anyone looking to buy a property. The market has moved on from the unsustainable growth we saw at the start of the century, and the subsequent crash in 2009, to a market that is going to provide consistent and safe returns for buyers.
Ricky: Can you explain in greater detail the changes that have occurred and why?
Peter: At the end of the 1990’s Marbella, in comparison with other destinations, such as France or Italy, was a relatively new market, in its early stages of growth.
In such immature markets, there are often opportunities for quick returns on investment, but these come with high risks. In Marbella’s case the rush of people looking to buy, combined with practically uncontrolled planning, meant that properties were often constructed and purchased without any real consideration regarding long-term viability.
Ultimately, a massive oversupply of properties was a perfect storm waiting to happen; the recession of 2009 brought it to a head.
Ricky: In what way has the market evolved that leads you to feel that it is a better investment now?
Peter: The crash of 2009 forced the market in Marbella to grow up very quickly and to learn from its past errors. Of course, there was a very painful period of correction, where prices had to find a more sustainable level; however, that period is now over. The market has reached a level of maturity that can provide consistent and reliable returns for anyone investing sensibly in property.
In particular, there is now a full understanding from the planning authorities that the pace of construction needs to measured, and the quality of construction maintained in order to to avoid the boom to bust scenario. Planning permission is now strictly regulated to ensure a supply of housing that is in line with the needs of the area.
Developers are also aware that quality is essential for today’s buyers. There is no appetite for poorly constructed developments with badly designed infrastructure.
Ricky: Do you believe that same crash could occur again?
Peter: Absolutely not. We need to look at supply and demand to understand why.
From the supply side we can see that the growth of new constructions will be controlled by the authorities, so there is no longer the risk of a sudden surplus of new properties. At the same time, the demand for quality constructions means that developments are going to take longer to construct, as more thought, and more resources, are invested into the projects.
However, even more importantly, we need to look at the demand side. Consider that in Europe alone there are some 300 million people. Of these, a significant percentage dream of a life in the sun. I do not believe that there are any other destinations in Europe that can offer the combination of lifestyle factors that Marbella can.
Marbella is just over 2 hours flight time from most of the major European destinations and is one of the most southernmost locations in Europe. In fact, on a clear day, you can see the north coast of Africa.
In many holiday destinations the winter months can be very cold, and the towns deserted. Marbella, however, with such a southern location and local micro-climate, has over 300 days of sunshine a year.
In the summer months the stunning beaches, restaurants, shopping and nightlife are renowned.
However, the winter is also one of the most popular seasons for many residents and holidaymakers. In fact, temperatures can reach the mid 20’s and there are often clear, bright blue skies. Perfect for golfers and, if you enjoy skiing, you can be on the pistes of the Sierra Nevada within 2 hours.
Thanks to an all-year-round climate, Marbella has been able to grow a solid infrastructure of international schools, restaurants, shops and services that are all essential for any sustainable property market.
From a buyer’s perspective, property in Marbella is not a short term holiday home, usable for only a couple of weeks a year. It is a home that can be used both in the summer and winter months. It is also perfect for long weekends, with many major European cities often only a couple of hour’s flight time away.
Ricky: Peter, what sort of property is available on the market at the moment? There was a stage, just after the crash, that there was a lot of very cheap, unsold property on the market.
Peter: That has all changed. There remains cheap property of course, but it is often cheap because it offers little value; perhaps because it is poorly located or poorly constructed. That is not the type of property that I would recommend. Were you to buy such a property, you could find it difficult to sell.
However, if you are looking for a property that offers you a fabulous lifestyle and is also an investment that is saleable, the market has reached its floor—prices can only increase.
Ricky: What does that mean for people looking to buy in the Marbella property market?
Peter: Confidence has returned to the market. Buyers now know that when they buy the right property, at the right price, they have made a good investment. Sellers can put their property on the market, as long as it is priced correctly, and feel confident the property will be sold at, or close to their asking price. Read more >