Potential of Rental Income:

Rising trend

The Spanish property market was overwhelmed with homes and apartments which were offered for sale with serious discounts! The time of the rock-bottom is now behind us for a while …

Since 2013 there is a clear increase in and around Marbella, month after month! Especially from 2016, the Spanish real estate market is not in crisis anymore with the result that the prices are increasing. If it’s luxury property that you are looking for, then Marbella is the perfect place to invest. Among the huge variety of luxury property, you are certain to find your dream home in Marbella. There is a growing number of visitors to Marbella due to its popularity, so now is the best time to invest before property prices rise even more.

Marbella is one of the places in the world that is always popular and will remain as it is because of its excellent micro-climate and the pleasant lifestyle.

Potential of Rental Income:

Real estate is a solid long term investment. It has a high return on investment for both the professional and the private investors, sometimes in the short term, but definitely on a long term basis.n Marbella there is a great shortage of good long-term apartments for rent. You can rest therefore assured of a fast and worry-free rental return (should you buy an apartment with 60% mortgage in place, the mortgage will be paid off with the rental income). The possibilities of renting short term, although higher, are more influenced by external factors like the weather in the rest of Europe and market ups and downs.
The normal return on the rental of an apartment between € 200,000 and € 700,000 will average 3.5% annually, which is better than the poor yield given by most of the banks.There are exceptional apartments giving a yearly rental income ranging from 8% to 10%.

The latest growth cycle, which can be said to have begun as early as 2012-2013, was characterized by a significant shift in homebuyer tastes and preferences that kicked off a ‘return’ to white-toned modern architecture. Combined with great advances in construction techniques, new building materials and the proliferation of technologies that would not so long ago have seemed pretty futuristic, this move towards contemporary, open-plan properties featuring the latest home automation systems has manifested itself as the main trend affecting the real estate market on the Costa del Sol these past years.

In the beginning there was a marked shortage of new stock of this kind due to several years of building inactivity – a hiatus that marks a dividing line between two distinct product eras – so the first pioneering investors and developers were well rewarded as modern homes were snapped up eagerly. Since then, many foreign investment funds are involved in new property development along the coast.

With significant numbers of new projects currently launched, under construction and already delivered to the market, supply (of new-build homes) is beginning to catch up. For those with a long memory it signals both that we’re in a healthy growth phase and that this is a warning signal. If compared to the previous up-cycle (read: property boom of the 2000s), it places us roughly in 2002, and while this was a time of boom it also proved to be a highpoint not long after which intrinsic demand for Costa del Sol properties was surpassed by a production machine in overdrive.

Planning and upcoming areas

You might think to yourself ‘what have urban planning and up-and-coming residential areas got in common?’ but Marbella’s problems in finding a workable directive to guide new development have pushed much of the activity towards Benahavís, Estepona, Mijas and Ojén.

The natural tendency in this area is centripetal, a process by which most investment and development has a way of being concentrated in Marbella, but the inertia caused by slow and arduous processing of planning permission applications has produced an opposite effect – a centrifugal shift to the outward lying areas.

In a way this is good, because it has allowed more scope for future growth in Marbella and prevented a real estate bubble from occurring in land and property prices here that would have resulted from the concentration of development within its municipal boundaries. The outward movement has absorbed much of the stresses, spread growth more evenly and also dampened the impact of price rises. This not only makes growth more sustainable but also allows new real estate ‘hotspots’ to develop, and they are great for investors and homeowners alike. So, while classic addresses such as the Golden Mile, Nueva Andalucía and La Zagaleta remain timeless gems they are now joined by increasingly in-vogue areas such as La Alquería, Atalaya, El Paraíso and the New Golden Mile.

As a result, there is a good mix of new developments on the market, mostly by large Spanish promoters backed by investment funds, many of which are American, though there are also private developers of smaller gated villas.

STRENGTHS

*  Growth of property sales and (to a lesser extent) prices is at sustainable levels
*  Costa del Sol property prices are generally still attractive to many across Europe and beyond
*  Historically low interest rates
*  High holiday let occupation rates and good long-term rental returns for property owners
* Security and quality of life
*  Good and yet improving connectivity
*  A good selection of properties and areas to choose from
*  Growth well spread out geographically