I would like to start this post mentioning that I am not a real estate professional, not even an aficionado… However I like to understand what is happening around me and I find it useful to look at facts to help me make some sense out of the information and misinformation we are subject to.
Trying to understand the depth of the crisis in Marbella, I have visited many real estate websites and forums. This is what professionals are generally telling us: Marbella real estate has come to a complete stand still… Prices are near bottom… Marbella properties are a good buy right now… Marbella is a brand that will come back…
I decided to do my homework and look directly at the raw data from the Ministerio de Vivienda (Housing Ministry). Here are a few interesting facts I found:
- In 2008, there were 25.1 million properties in Spain, of which 4.4 million were in Andalucia and 1.0 million in Malaga province.
- On January 1, 2009, there were 21,092 properties for sale in Malaga province, or 13.5 properties per thousand inhabitants. In addition, there were 8,977 properties under construction for sale.
- Out of 100 municipalities in Malaga province, 24 had more real estate transactions in the first half of 2009 than in the first half of 2008. However, there were 4,476 less transactions in total for the province, representing a drop of 30%.
- Among the municipalities showing growth in transactions, we find Monda (+25%), Benhavis (+54%), Alfarnate (+820%!- small base but still…)
- Among the municipalities with a drop, we have Torremolinos (-13%), Benalmadena (-23%), Marbella (-32%), Estepona (-58%)
- The proportion of foreigners (residents or not) buying properties in Q2 2009 is 20.3%, higher than in Q2 2008 at 19.2%, but lower than in Q2 2007 at 26.2%
- The average price per square meters in Marbella was 2,598 euros in Q2 2009, vs 2,833 in Q2 2008 and 2,805 in Q2 2007. This is only a drop of 8% from 2009 to 2008.
Statisitics are tricky. They often fog reality with averages, different base sizes, apparent correlations… However, I will risk a few common sense impressions:
- The real estate crisis is deep but there is business out of there, albeit not for all the former players…
- The level of houses available seems way too high. This is going to be a buyers´market for a long while…
- Prices may not have reached their bottom yet…
- Foreigners have not left and represent a potential source of growth in the future if Spain recovers more slowly than its neighbours…
- There may be some encouraging signs for people focusing in winning niches…
So should one buy a property now in Marbella? As always in business, it all depends on the price. Most products bought at a very discounted price offer an opportunity for a nice return, the same goes for real estate.
Considering the facts that the recovery will be slow, the money invested will not be accessible, the real estate prices may still go down, rental income is limited, I would personally need to find a very significant bargain to invest in a property right now. However, If I were to look for a property to live in, then this may a good time to find the house of your dreams…
Filed under: Work | Tagged: 2009, Marbella, real estate, statistics | Leave a Comment »
