Real Estate Market Analysis and Predictions - Estepona

Estepona Real Estate Market

The real estate market in Estepona, Spain, experienced a notable year in 2023, characterized by significant trends and transformations that shaped the market dynamics.

Price Surge and Market Dynamics The year witnessed a substantial increase in property prices in Estepona, a trend particularly pronounced in comparison to the pre-2008 recession period. This surge in prices was driven by heightened demand from families and investors, attracted by the town's improvements and growing popularity. As a result, real estate agents frequently overvalued properties, leading to a cautious approach from potential buyers who were wary of the escalating prices.

Market Stabilization Following the initial surge, the Estepona real estate market began to stabilize. Property prices saw a gradual decline, aligning more realistically with market expectations. This correction fostered a healthier environment for both buyers and sellers, characterized by a steady stream of sales. Despite the earlier price hikes, the market avoided becoming overly inflated and stagnant.

Impact of International Factors The broader economic climate, particularly in other European countries, influenced Estepona’s real estate market. Sales were impacted by uncertainties abroad, with potential buyers being more cautious. However, new interest from international buyers, notably from Poland and Canada, added a fresh dimension to the market, diversifying its appeal.

Property Prices and Sales Figures By December 2023, the average asking price for residential properties in Estepona was €3,414 per square meter, marking a 13.27% increase compared to December 2022. Similarly, the average rent asked was €15.53 per square meter, a 28.56% increase from the previous year. The market saw its peak in prices in December 2023, both for sales and rentals.

Regional Disparities Different areas in Estepona showed variations in pricing. For instance, the highest asking price for properties for sale was in the El Padrón-El Velerín-Voladilla area, while the lowest was in the Centro area. Rental prices mirrored this trend, with the highest in the Bel-Air-Cancelada-Saladillo area and the lowest again in Centro.

Looking Ahead As Estepona moves into 2024, it remains an attractive destination for real estate, offering a blend of traditional charm and modern amenities. The market’s performance in 2023, with its ups and downs, sets a precedent for a dynamic and evolving real estate landscape in the future.

In conclusion, Estepona's real estate market in 2023 was marked by significant price increases, a gradual stabilization, and a diverse interest from international buyers, all playing a pivotal role in shaping the market's trajectory

Predictions for 2024

The property market in Estepona, Spain, is an intriguing subject as we move into 2024, reflecting broader trends in the Spanish real estate sector. Various analysts and real estate experts provide insights into what we can expect in the coming year.

Price Trends and Market Dynamics

A key trend is the stable, yet slightly increasing, prices in high-demand areas. Estepona, being a part of the western Costa del Sol, fits into this category. The Real Estate Employers Association and other experts predict that in some Spanish areas, prices might need to decrease by about 10% to become more affordable, although it's uncertain if this significant decline will occur in the next 12 months. In contrast, places like Estepona may continue to see price rises due to their high demand.

Sales and Supply Outlook

In 2024, the number of sales in the Spanish property market is expected to align with those in 2019. However, a notable aspect is the low inventory levels, especially in sought-after locations like Estepona. This shortage is particularly acute for new homes, creating a situation where demand outstrips supply. Consequently, this might lead to price increases, especially in the resale market.

Impact of Foreign Buyers

Foreign buyers, including digital nomads and affluent retirees, are a significant driving force in the Spanish property market. Areas like Estepona are particularly attractive to this demographic. The potential relaxation of the 90-day rule for British second homeowners could further increase British demand for properties in Spain, including Estepona.

Rental Market and Investment Returns

The rental market has also seen significant shifts. With a decrease in the supply of permanent rentals and an increase in seasonal rentals, rental prices have gone up. For investors, properties in Estepona and other similar areas continue to offer attractive returns, with homeowner profitability increasing in 2023.

New vs. Existing Construction

The market for new construction is expected to see price increases due to limited supply and rising costs for materials and sustainability requirements. In contrast, the market for existing homes might offer more room for price negotiations due to the personal circumstances of sellers.

Economic and Geopolitical Factors

The broader Spanish economy and geopolitical uncertainties, including the situation in Ukraine and inflation, also play a role in shaping the property market. These factors might influence foreign investment and buyer demographics, further impacting property prices and sales in Estepona.

In summary, Estepona's property market in 2024 is likely to be characterized by stable or slightly increasing prices in high-demand areas, a continued shortage of new build properties, significant foreign buyer interest, and a dynamic rental market. However, these predictions are subject to change based on evolving economic and geopolitical situations.

Conclusion

The Estepona real estate market in 2023 witnessed notable changes, with a rise in property prices, changes in buyer behavior, and the impact of international economic factors. The market, however, demonstrated resilience and adaptability, eventually finding a balance. Predictions for 2024 indicate continued growth, albeit at a moderate pace, making Estepona a promising location for real estate investment. The market's appeal to international buyers and investors remains strong, underpinning the positive outlook for the future.

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