It's no real surprise that it's been over a year since we last posted on our blog, what with covid wreaking havoc across the globe, lockdowns, travel restrictions, all leading to normal life as we know it being upended by the coronavirus pandemic, we didn't really have anything positively interesting to write about.
Now, after a full year of such great change, and with the vaccination program being rolled out at quite an astonishing rate, in the UK at least, we thought we would tentatively poke our disposable-masked faces above the turrets to update you regarding property sales during the past 12 months and give a very cautious prediction to the Marbella real estate market of 2021 according to the evidence of what we are seeing with the market conditions today.
To begin this article accurately, we must rewind to 2019 to look at how the property market was before covid-19 struck. 2019 was the best year for property sales at La Reserva de Marbella since the financial crash of 2008 some 11 years prior. Property sales prices were steadily increasing with demand, although these prices were down on the peaks of the early years of this century and so there were some real bargains still to be had. With bank interest rates low and international travel cheap and easy, all real estate industry forecasts towards the end of 2019 were very positive and predicted continued growth through 2020, and why not? Well, because nobody had foreseen the global pandemic that we all now know as C-19.
The traditional flush of visitors and property purchasers to the Costa del Sol in Q1 2020 was completely curtailed as the virus struck European shores to spread like a human tsunami through every country, leading swiftly to very severe emergency restrictions being imposed.
In direct response to the virus wreaking havoc across Spain, especially in the large cities where population density is at its highest, in Q2 2020 the Spanish government ordered the entire population of the country to stay home, except to make the most essential journeys for supplies. As with almost every other business sector, the real estate industry was brought to a complete standstill.
It was at this time that the most vocal predictions were for another crash in property prices, but this did not truly materialise. Some sellers keen to exit in time for Brexit did slash prices, but Brexit was a known factor years prior and these properties sold very quickly to leave the vast majority of vendors holding firm on their asking prices. Furlough payments from central government in every EU country and the UK helped property owners and potential buyers to stay afloat. Additionally, buyers of Spanish homes of the last 10-15 years generally bought at discount prices in the crisis years and/or have had time to pay down the mortgage, so overheads remained relatively affordable. Holiday rental property owners simply moved to long-term rental, if additional income was required, and so with bank interest rates at record lows and the financial markets bouncing back to often surpass the dizzy heights of 2019, owning a property in Marbella had probably never been more affordable in real terms.
Q3 2020 saw some restrictions lifted, with international travel opened for a few short months. We saw a flurry of sales through the July to October period of last year and very few reductions in asking prices. However, the number of buyer clients arriving from overseas was, of course, way down on previous years and so the market was largely of local residents that could travel rather more easily. Video tours of properties for sale also supported sale transactions, with buyers abroad purchasing properties through Zoom, YouTube etc., all from the comfort of their own homes, a new phenomenon that is still growing in popularity, especially with younger buyers today.
Q4 2020 saw another wave of C-19 lockdowns and travel restrictions forced upon us, thus blighting the short bounce-back. The municipality of Marbella had its borders closed for a number of weeks and all non-essential businesses were ordered to stay closed, including the real estate offices. These heavy restrictions reduced the number of buying clients from other parts of the Málaga province to zero and this slowed the turnover of properties that we would usually have anticipated selling very quickly during that quarter. Restrictions were lifted for Christmas and new year, although property sales during the festive season are traditionally very few in number and so the real estate industry gained little to nothing from these few weeks of being allowed to open for business.
Further to the opening up of society for Christmas and new year, the seemingly inevitable growth in covid numbers quickly had Marbella back under severe restrictions in January 2021. Again the border closed and non-essential businesses were forbidden to open their doors. This was the final straw for many businesses, real estate offices included, and compounded a very miserable winter for those that managed to survive: we are still in the very toughest of times.
That being said, following on from the lifting of restrictions in mid-March 2021, we have again been receiving record numbers of inquiries and we have made a good number of sales, all at close-to-asking-prices. We are seeing a massive growth in the number of visitors to our websites and are receiving record numbers of client inquiries by email and phone, but with clients abroad and unable to travel, sales are taking longer and involve a lot more work. Local buyers are currently enjoying the lion's share of the market with little competition, although this is changing by the week as travel restrictions are lifted between provinces, municipalities and countries.
So, what is our forecast for the real estate market of La Reserva de Marbella for the rest of 2021? Well, this is obviously a million dollar question! However, we are willing to conclude by offering our take on the factual evidence that we are seeing here in La Reserva de Marbella today.
Given the record high levels of interest from clients requesting further information, as well as the remarkable rate of the rolling out of the covid vaccines, we believe that, if travel restrictions can be lifted as planned, Q3 and Q4 2021 could see a very sharp upturn in visitor numbers, property sales and prices. New construction on the Costa del Sol has continued unabated during the pandemic and almost all new developments are being delivered on time (click here to see our YouTube video to showcase this). Demand for these new projects is usually linear to the resales market and we have not seen such growth in the construction industry here since the peaks of 2005 and 2006.
Additional factors include low interest rates and the banks' lending criteria being extended. The Costa del Sol's golden boast of more than 320 days of sunshine very year, coupled with the fact that we have all been confined to our homes for the best part of 12 months, it seems that all pointers are to a sharp correction towards positive growth over the coming months and likely through most of 2022 too. UK clients also have the GBP-EUR exchange rate to work with. The value of the pound has touched 1,18€ as we write this, almost reaching the pre-pandemic level of 1,20€, making the purchase of a home in Marbella even more affordable again. All this even before the UK government targeted dates of the roadmap-out-of-lockdown have been achieved.
Of course, if we have learned anything from 2020 then it is that absolutely anything is possible and U-turns can happen at any time. But, for many, the hard evidence of the positive evolution out of this 'coronvirus era', will no doubt lead them to conclude that 2021 and the coming years represent an outstanding time, perhaps even an historic opportunity, to purchase a property in this area.
We at APEX Marbella Property are monitoring the La Reserva de Marbella real estate market extremely closely and our offices are located in the heart of La Reserva de Marbella. We are the area's leading real estate agency for sales and we have the biggest and best choice of properties for sale here. If you are looking to buy or sell a property in La Reserva de Marbella and would like the latest information of market conditions, then please do not hesitate to contact us and we will be very pleased to assist you further.