Andalusian property market – Boom in luxury real estate among international buyers

Andalusia is the southernmost and second largest autonomous region in  Spain, consisting of eight provinces in total. It is one of the most popular holiday regions in Europe,  thanks to its exceptional geographical location on the Mediterranean Sea between Africa and Europe,  and due to its subtropical climate, rich cultural landscape, excellent infrastructure, and multitude of  leisure activities. The high-profile heart of this region is the “Costa del Sol”, which stretches over 150  kilometres from Málaga down to Gibraltar. Real estate along this coastline has been in high demand  among private buyers and investors during the pandemic, which is reflected, in turn, in high prices.  „Andalusia’s property market is proving stable, despite the pandemic. Meanwhile, in the premium  segment, increasing demand and limited supply is driving an upturn. International buyers in particular  are currently looking either for a permanent residence for their own private use or for an attractive  holiday home with reliable potential for returns in the long term. Since the outbreak of the pandemic,  investor interest has tended to centre on substantial villas and contemporary new builds with plenty of  outdoor space, offering room for remote working and leisure activities,” says Smadar Kahana,  Managing Director at Engel & Völkers Marbella.

Hamburg - (Image source: Engel & Völkers Marbella Puerto Banús)

Marbella: Up to 20 million euros for premium homes on the Golden Mile 

The most expensive and sought-after locations in Andalusia are on the Costa del Sol, in the elegant  coastal resort Marbella and the provincial capital Málaga. In 2020, Engel & Völkers recorded the highest  prices on the upmarket “Golden Mile” in Marbella. This five-kilometre-long coastal road, lined with  exclusive beachfront homes set in idyllic grounds between the sea and the mountains, is regarded as  the epitome of luxury. Outstanding premium properties here with private beach access, distinctive architectural styles and top-class amenities commanded prices of up to 20 million euros; apartments  with the same standards and attributes sold for as much as 20,000 euros per square metre. 

„Marbella’s real estate market is very cosmopolitan. A fact that is certainly reflected in our buyer profile:  approximately 55 percent of Engel & Völkers clients in Marbella come from abroad, primarily from  Germany, Scandinavia, United Kingdom, France, and the Netherlands. Demand at the moment is  focussing on luxury homes with ample outdoor space, and especially on villas refurbished to a high  standard and modern new residences spanning around 700 square metres, as well as luxury  apartments that are at least 120 square metres in size,” Smadar Kahana reveals. Last year, villas of  this calibre changed hands in the premium location of Los Monteros, in the east of Marbella, for up to  7 million euros. Turnkey apartments here with panoramic sea views sell for 6,000 euros per square  metre. Further up inland from the centre of the resort, the elegant district of Sierra Blanca is known as  the “Beverly Hills” of Marbella, made up first and foremost of substantial and lushly landscaped plots  set within gated communities. The area is highly sought after among European families for the privacy  and security it offers. They are seeking a comfortable second home and the security of a real estate  investment that promises to retain its value, even during periods of crisis. The average price for villas was 2 million euros in 2020, with high-end apartments selling for an average of 5,000 euros per square  metre.

Málaga: Peak in demand for contemporary new builds and renovated villas 

57 kilometres east of Marbella lies Málaga, the birthplace of Pablo Picasso and one of the most popular  holiday destinations in southern Spain. Residential property prices in the Moorish port city are more  moderate than in neighbouring Marbella: In 2020, the peak price per square metre in Marbella of 9,100  euros in premium locations was around a third of that registered in Marbella, thus offering properties  for first-time buyers that fit the brief and serve as a sound investment. The most sought-after addresses are in the historic city centre and in direct proximity to the beach, such as the La Malagueta neighbourhood. This desirable area is well-known for its beach of the same name, which is considered  one of the most beautiful in Andalusia. In 2020, the highest sale prices in the port city were recorded  here: 4 million euros were fetched for renovated first class villas. „Prospective buyers in Málaga are  currently looking for properties that offer extensive outdoor space so that they can continue to enjoy their hobbies despite the pandemic and aren’t forced to compromise on their quality of life. Many are  also seeking to work remotely from here, so modern fincas and newly built apartments with top  technical standards are proving very popular,” says Marnio Garnica, Managing Director at Engel &  Völkers Málaga, adding: “It is certainly worth investing in real estate here at the moment. We anticipate that, once the pandemic is over, travel restrictions are lifted and interest in properties like these picks  up even more, there will be an even greater shortage of supply and prices will increase as a result.” 

Cádiz: International purchase power is driving up property prices 

In southwest Andalusia, on the “Costa de la Luz”, the historic coastal city of Cádiz is one of the oldest  cities in Europe. Still untouched by mass tourism for the most part, the picturesque old quarter boasts  magnificent sacred architecture from the Baroque period, along with panoramic beaches and pristine  natural surroundings further inland. International buyers dominate the market in Càdiz itself, particularly  in Sotogrande Alto, in the south of the province. „75 percent of the transactions involving detached  properties here are made by foreign buyers. The discretion, security and exclusivity of this area,  coupled with proximity to the marina and excellent golfing amenities, are attracting greater numbers of prospective buyers than ever. Meanwhile properties rarely come onto the market,” says Smadar  Kahana. In 2020, for example, the price per square metre in El Mirador, an exclusive residential  complex in Sotogrande, peaked at 9,500 euros. In the equally upmarket gated community of La  Reserva, which consists of various private residential complexes, exclusive villas with top-end  appointments sold for as much as 9,7 million euros. The market experts at Engel & Völkers are  forecasting an unprecedented boom for the luxury real estate market in Sotogrande in 2021, as not  only have several premium hotels recently opened here, but another prestigious luxury residential  complex is being realised. Similar to the first-class „La Zagaleta" complex in Marbella, „La Valderrama  II" in Sotogrande has golf courses, equestrian facilities and luxury villas. 

Outlook: Stable residential market set to boost appeal in 2021 

Residential real estate in Andalusia’s sunny coastal regions will retain their appeal as investment  opportunities offering long-term stability, especially among international clients. “In 2020, we witnessed  the resilience of the local real estate market first hand during lockdown, and are very confident that this positive development will continue in 2021. We are forecasting a rise of approximately 30 percent in  overall transactions. We also anticipate that regions located further inland will also become ever more  sought after, alongside traditionally popular locations in Marbella, Málaga and the gated communities.  Now is a good time to invest in properties offering the potential for expansion and modernization to a  luxury standard, as a capital investment for the future,” Smadar Kahana advises. She adds: “Even  though our international clientele has been enthusiastic in taking advantage of the digital 360° tours  we offer, we will be pleased when travel restrictions are soon lifted, and buyers and sellers can pursue  their property aspirations in the real world once again.”

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