If you are considering real estate investing in Marbella, Spain, you will want to get an idea about the state of the Marbella property market in 2018. A quick perusal through business and economic press outlets such as Bloomberg or Financial Times, reveals that the outlook for real estate and home construction in Spain is positive. The Spanish real estate market is in robust health, with 2017 data showing a sound upward trend in both sales and prices after the crisis years in which the Spanish housing market experienced strong losses. According to the Spanish National Statistics Institute (INE), housing sales increased almost 15% from 2016 to 2017.
Evolution of housing prices in Spain (Euros per square metre, per quarter)
Investing in Marbella Spain 2018
As we can see in the chart above from real estate analyist Tinsa, the price of housing in Spain is steadily recuperating, but nowhere near the previous high point in 2007, and outlook for the real estate market is positive. Here are some of the reasons why real estate investing in Marbella in 2018 is an excellent proposition for buyers who are seeking an investment for the coming months and years:
1. A popular destination among foreign buyers
Spain remains a top destination for visiting holidaymakers and permanent residents who flock to the sunny shores of the Spanish coast line from the EU and further abroad. Spain is a very safe country, generally ranking among the top 20 safest countries in the world, according to the Global Peace Index. It’s ranking has fallen this year due to political tensions between the central government and Catalonia, but this tension does not impact daily life for the vast majority of residents. In fact, these tensions have created opportunities for some buyers as prices have remained steady over the past year as a result.
Historically, Spain has been a popular destination for the British, but is increasingly chosen as homebase by Nordic, German, Belgian and Dutch citizens. Marbella is especially attractive as a real estate investment for these foreign buyers as the area boosts large expat communities and infraestructure– from clubs, schools, summer camps to cultural events, Marbella’s foreign residents enjoy the best of Spain without ever feeling far from home. Marbella is served by the Malaga international airport, and is an easy and affordable flight from all major European cities.
Thus, Marbella is popular not only among Spain’s most discerning citizens for its luxury, beauty and quality of life, but also among foreign buyers, making it an ideal investment opportunity due to its wide appeal.
2. Sunny economic outlook
As mentioned in the data points at the beginning of this article, the Spanish economy is looking up, as is the real estate market. It is a perfect time to invest in the Spanish housing market, as conditions are brisk, without the bubble-inducing frenzy of the past. All indicators point to the notion that real estate investors who purchase in Spain in 2018 can expect a healthy return on their investment over the long-term.
In addition, the Marbella area is one of the most popular among high-end buyers who are more impervious to market volatility, an added bonus when investing in real estate in this area.
Source: Knight-Frank The Wealth Report, 2018
3. Rental income is a reality and a boon for investors
Throughout Spain, there has been a significant increase in rental yields in the property market. The recuperation of the property market, along with increased pressure from short-term rentals such as Airbnb, have resulted in a steady rise in rental rates, and rental income for those who rent out their property. This means you can purchase a home in Marbella and rent out the property long-term or for holiday rentals quite successfully. This is a great way to recover your investment and cover the costs of owning a home in Marbella. According to the Global Property Index, Spanish rental investment yields are almost 5% (you can download here the full list of European rental property yields here). The strong rental market brings added peace of mind to real estate investors in Marbella.
In addition, the popularity of Marbella as a summertime and holiday beach destination means that rental income can significantly increase in the holiday period.
4. Banking conditions are excellent
After the economic crisis and the creation and consolidation of debt in the “bad bank” Sareb in 2012, the financial sector has greatly stabilised. This means that banks are offering home loans again, and this, coupled with the fact that European interest rates are low, make it an excellent time to purchase residential real estate in Spain. Conditions are different for non-residents, but the Spanish banking sector offers competitive home loan rates and packages for foreign buyers.
5. A variety of home types for purchase
The Marbella and Spanish real estate markets offer a wide variety of options– there are many choices for the prospective home-buyer: luxury villas and single-family properties, semi-detached houses, planned communities, penthouse apartments and ocean-view flats with all amenities, to name a few. No matter at what stage of life you are in or the type of lifestyle you enjoy– Marbella offers options to fit every preference. This means your investment will also bring you lots of gratification along the way. For many buyers, the knowledge that they will be able to enjoy the Marbella lifestyle whilst making a sound investment is a major plus to investing in the area.
6. Let’s face it, the weather is great!
Although this factor is not listed on the world’s major economic indicators in the financial press, the fact of the matter is that Marbella has some of the best weather in Europe. 88% of our days are sunny, and the climate is ideal for golf, tennis, going to the beach or other outdoor activities. Shedding the winter blues and enjoying the relaxing and upbeat lifestyle of Marbella may be your best investment yet.
If you want to learn more about the advantages of Marbella living, check out our Marbella and Costa del Sol FAQ.
Information given is offered for informational purposes, excluding the company and the author from all responsibility, and does not constitute an official publication nor will it be legally binding. We always recommend checking with your lawyer or adviser.
Massimo Filippa
