Buying property on the Costa del Sol still has many benefits
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Articles on Spain
Stretching 300 kilometres from Nerja to Gibraltar, Andalucias sunshine coast has been floating the boat of thousands of property investors for some five decades.
Shielded by the mountains of the Sierra Bermeja, the climate is possibly the most enviable in the whole of Spain, providing near-perfect weather all year round; but there’s plenty more to buying poperty for sale on the Costa del Sol than endless days of rays. There’s a plethora of recreational activities, including over 60 golf courses, numerous water sports, tennis, horse riding and even polo. Plus there’s an abundance of medical centres and international schools where expat children can sit their GCSEs and A-levels. All vital factors for Britons considering buying property on the Costa del Sol.
Socially, as well, the area is alive with opportunities, from the nightclubs of Benalmadena, to the restaurants of Nueva Andalucia. And if the glitz of Marbella and Puerto Banus prove too much, cultural refrains can be found in Granada, Seville and Cordoba all just a short drive away.
So with such a surplus of attractions, where have the majority of people been buying property on the Costa del Sol? Well, Puerto Banus is the most desired location, being on the prestigious international circuit for wealthy jet-setters. Who wouldn’t want a Puerto Banus post code? Buying a property at Nueva Andalucia is also favoured by both the permanent buyer and Puerto Banus aficionados who don’t want to be right in the thick of it but sufficiently close. It’s also a preferred choice for golfers, with a huge valley that harbours no less than six courses.
Buying a property in Marbella remains popular for those looking for an authentic Spain - picture horse-drawn carriages and cobbled plazas shaded by orange trees. Elviria, 15 minutes east of Marbella is a quiet coastal community with fabulous beaches, plenty of golfing property options and easy access to the picture-postcard port of Cabopino.
Buying a property on Mijas Costa also appeals to families and golfers due to its proximity to the airport, abundance of shops, bars and restaurants and its appealing Blue Flag beach. Sotogrande offers the jet-set charm of Puerto Banus but in a more hushed manner. When it’s not hosting prestige sporting events like the Volvo Masters at Valderrama golf club, Sotogrande really is a calm and quiet neighbourhood ideal for families.
A developing expanse between San Pedro and Estepona is also commanding the attention of astute property investors according to Julian Merck, managing director of Merck Estates: The New Golden Mile offers potential buyers and investors some of the most luxurious property developments in one of the last stretches of beachfront coastline.
Much has been written about the state of the Spanish property market recently, and how it is affecting the Costa del Sol in particular. Merck admits that there has been a wobble, but believes it was inevitable. Yes there has been a price wobble, but more of a simple correction, particularly with buying property on the Costa del Sol. This should not scare potential buyers. If we look at the past ten years, specifically between 1998 and early 2004, thousands of property investors were only looking for short-term gain and were purchasing standard two-bedroom apartments off-plan left, right and centre, thus over-inflating the market and hyping up prices. (Similar to what can be seen happening in Bulgaria and Morocco now.) At that time, capital growth was 19 per cent per annum and any market, Spain or otherwise, cannot sustain such velocity.
Christopher Clover, managing director of Panorama Properties, agrees: Most speculators stopped investing in coastal developments when buying off-plan property on the Costa del Sol ground to a halt in 2004, when prices of land and construction reached unacceptable levels, thus preventing buyers from selling on their speculative purchases.
The consequent oversupply on the coast of new two- and three-bedroom apartments and townhouses has resulted in a price drop in real terms of maybe 15 per cent or more for these types of property in the last three to four years. It is indeed a buyers’ market for this category of property in some parts of Marbella and surrounding areas, and there are some real bargains now appearing at price levels that may not repeat themselves in future years.
Although certain types of properties on the Costa del Sol may be experiencing a dip in true value, expected capital growth when buying property on the Costa del Sol, on the whole, is a conservative nine to ten per cent per annum in desirable urbanisations, according to Merck. He also reckons that a rental potential of between eight and 16 weeks is the norm, though the actual returns are entirely dependent on factors such as location, number of bedrooms, type of property, orientation and furnishings.
Whether this capital growth will continue is anybody’s guess. But the vast majority of those in the know are optimistic, particularly because of the many changes happening in Marbella and the Costa del Sol, most implemented by the city’s new mayoress, Angeles Munoz. Her new General Plan aims to help protect Marbella from future overbuilding, which will enable estate agents to focus more on the resale property market. Additionally, Malaga’s new airport terminal and runway, well under construction, will almost double the airport’s capacity to 20 million passengers a year. The new planned coastal railroad linking Nerja, to the east, and Estepona, in the west, will also become a reality in the next few years. And a new AVE fast train from Madrid to Malaga will reduce travel time between the two cities to just two and a half hours - opening a comfortable alternative mode of travel to the province.
So what does all this mean for buying property on the Costa del Sol? In the next two years, I see vendors finally realising what true market value is, says Merck. I also predict the end-user market will continue to grow with increasing relocation buyers.
Clover is equally optimistic, particularly for Marbella’s future: With the closing of the Gil era, and the arrival of Angeles Munoz, we are in the process of witnessing the rebirth of Marbella and exciting times lie ahead for the city and its people. Marbella is now reaching out to realise its true potential, and to consolidate its place as the world-class, quality resort destination of the 21st century.
Read our other articles about buying property in Spain:
as well as our overseas property news stories affecting the Spanish property market or view our range of property for sale in Spain.
First published in Homes Overseas Magazine April 2008.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
