Real Estate Market Analysis and Predictions - Nueva Andalucia

Nueva Andalucía Real Estate Market

The real estate market in Nueva Andalucía, Marbella, saw significant activity and developments in 2023. This region is known for its luxury properties and holiday rentals, and it continued to attract high demand throughout the year.

Market Trends and Price Dynamics: In December 2023, the average asking price for residential properties in Nueva Andalucía reached €5,122 per square meter, which was a 10.29% increase compared to December 2022. This price peak in December 2023 represented the highest in the past two years, with the lowest asking price recorded in February 2022 at €4,081 per square meter.

Similarly, the rental market in Nueva Andalucía also experienced a rise. In December 2023, the average rent asked was €19.40 per square meter per month, marking a 17.79% increase from December 2022. This rise in rental prices indicates a strong demand in the holiday rental market, which is a significant component of Nueva Andalucía's real estate sector.

Luxury Real Estate and Foreign Interest: The demand for luxury properties in Nueva Andalucía remained robust, with an increase in sales, especially in the high-end market. This trend was not only observed locally but also mirrored in other prime real estate markets such as London, Dubai, and Miami. The luxury end of the market in Marbella, which typically involves properties priced above €2 million, showed even stronger sales in 2023 compared to 2022. It's noteworthy that a considerable portion of these luxury property purchases were made without mortgages, indicating the financial strength of the buyers in this segment.

Supply Shortages and New Developments: A shortage in the supply of new or refurbished properties for sale was evident in the area. This shortage is attributed to a limited number of building projects approved in Marbella, partly due to the scarcity of fully-zoned building land. Despite the challenges, new developments continued, including luxury villas, apartments, and townhouses with modern amenities and high-quality finishes.

Outlook for Nueva Andalucía's Real Estate Market: The market in Nueva Andalucía is expected to remain active, with continued growth in the holiday rental sector. The demand for luxury properties and holiday rentals is anticipated to stay strong, driven by foreign buyers and investors. With new real estate projects on the horizon, Nueva Andalucía's real estate market is set to offer a range of attractive options for investors and homeowners.

In conclusion, Nueva Andalucía's real estate market in 2023 was characterized by a strong demand for luxury properties, a significant increase in prices, and an active rental market, with a promising outlook for continued growth and development in the coming years

Prediction for 2024

The property market in Nueva Andalucía, Marbella, is exhibiting a robust and dynamic growth as we head into 2024. This trend is reflective of the broader patterns observed across the Marbella region and the Costa del Sol. Here's an overview based on the latest insights and analyses:

Sales and Demand Dynamics

Luxury Property Sales: The sale of luxury properties in Marbella has seen a notable surge. In some cases, sales increased by up to 20% in the highest-end of the market compared to the previous year. This trend is a part of a wider movement observed in other prime locations globally, indicating a strong market for high-end real estate.

Shortage in Supply: There is a significant shortage of new or refurbished properties for sale in Marbella. The stock of properties for sale in Marbella, including areas like Nueva Andalucía, dropped considerably in the first quarter of 2023 compared to the same period in 2022. This shortage is a consequence of limited fully-zoned building land in Marbella, pushing property developers to nearby areas like Estepona or Benahavís.

Price Trends

Rising Asking Prices: Asking prices in Marbella have risen on average by about 15% year-on-year. This increase is attributed to the diminishing stock of properties and increasing demand.

Increased Value in Key Areas: Specific areas in the Costa del Sol, including Marbella, have seen substantial increases in property values. Marbella, for instance, experienced an 18.6% increase in property values, with a noticeable spike in prices between December and March.

Rental Market

Shortage in Long-term Rentals: There's a notable lack of long-term rental properties in the Costa del Sol, with a 15% drop in supply in the region. Rental rates are spiraling upwards, with Marbella seeing an average rent of 16.70 € per square meter, a significant year-on-year increase.

Market Outlook

Continued Foreign Interest: International buyers, including from Northern and Eastern Europe, and increasingly from North America, continue to be a significant force in the market. These buyers often pay more per square meter than domestic buyers, a trend that has continued in recent years.

New Developments and Promotions: Several new real estate promotions and developments are planned for Marbella and surrounding areas like Nueva Andalucía. These developments are expected to cater to the high demand for luxury properties and holiday rentals.

Key Insights

Quality over Price: In the luxury segment, there is a shift towards high-quality properties. Buyers are willing to pay more for such properties, moving away from the earlier trend of seeking more affordable options.

Buyer Preferences: Current trends indicate a preference for turnkey properties, with buyers willing to pay a premium for new build or key-ready properties, particularly villas in gated communities.

In conclusion, the property market in Nueva Andalucía, Marbella, is characterized by strong demand, especially for luxury properties, a shortage in supply leading to increased prices, and a robust interest from international buyers. This market dynamic presents both challenges and opportunities for investors and buyers alike. The situation is continuously evolving, influenced by various factors including foreign investment, local economic conditions, and urban planning developments.