Asking prices are getting higher and higher, buyers grabbing the cheaper options

What buyers and sellers need to know in 2024

Marbella, along with Estepona and Benahavís, forms the highly sought-after “Golden Triangle” of Spain’s Costa del Sol. Known for luxury properties, world-class amenities, and exclusive residential communities, this area has consistently attracted affluent buyers from around the globe. However, as we enter 2024, some new trends are emerging in the real estate market, and these trends are crucial for both buyers and sellers to understand.

Key Trends in the Golden Triangle

1. Rising Asking Prices Continue

The first quarter of 2024 has shown that property owners in Marbella, Estepona, and Benahavís are still increasing their asking prices. Over the past year, asking prices in Marbella have risen by 11%, while Benahavís has seen a 13% increase. For the last three years, double-digit growth has been the norm, as homeowners continue to set higher prices for their properties. According to Dr. Zsolt Miguel Horváth, founder and CEO of Move2Marbella Real Estate, this rapid price growth is unsustainable in the long term. While recent years have seen as much as 5% annual growth, Dr. Horváth predicts a more moderate price increase moving forward.

2. Buyers Are Less Willing to Pay Increased Prices

Despite the rising asking prices, actual closing prices have started to show a different trend. In Marbella, closing prices have decreased by 1% compared to the first quarter of 2023, and there has been a slight decline for the last two quarters. Similarly, Benahavís has also experienced a 1% drop in closing prices. This marks the first time since the pandemic in 2020 that prices have flattened or slightly decreased. While sellers remain optimistic, buyers are more cautious and less willing to pay these inflated prices.

3. The Gap Between Asking and Closing Prices Is Widening

One of the most notable developments in 2024 is the growing gap between asking and closing prices. In Marbella, this gap has now reached 15%, while in Benahavís, it is around 10%. This widening disparity highlights the disconnect between what sellers want and what buyers are prepared to pay. As this gap grows, it could begin to impact the number of real estate transactions, as more buyers may opt out of deals where they feel the price is unjustified.

4. Limited Negotiation Room in the Most Desirable Areas

Negotiating property prices in the Golden Triangle is not easy. According to Dr. Zsolt Miguel Horváth, the maximum room for negotiation is typically around 5%, and in some cases—especially when the seller is Spanish—there may be no room for negotiation at all. This limited negotiation space reflects the high demand and low supply in the luxury market, where properties often sell very close to their asking prices.

5. Appraisals Are Rising More Slowly Than Asking Prices

While asking prices are rising rapidly, property appraisals are growing at a slower rate. Over the past year, appraisals have increased by 6.3%, which is about half the rate of growth seen in asking prices. This disparity can affect the mortgage approval process, as banks and lenders may be more hesitant to approve loans based on over-inflated asking prices that exceed appraised values.

What Does This Mean for Buyers and Sellers? For Buyers: It’s important to approach the market with caution. While the gap between asking and closing prices is growing, many sellers in the Golden Triangle remain firm on their prices. Be prepared for limited negotiation opportunities, especially in the most sought-after areas like Marbella and Benahavís. Working with an experienced real estate agency like Move2Marbella Real Estate can help you navigate these challenges and identify properties where negotiation may be more feasible. For Sellers: If you’re selling a property, consider your pricing strategy carefully. While it may be tempting to increase your asking price to keep pace with market trends, the widening gap between asking and closing prices could result in longer sales times or fewer transactions. Buyers are becoming more cautious, and setting unrealistic prices could deter potential offers. 2024 Market Outlook

Looking ahead, several factors could shape Marbella’s real estate market. Falling interest rates and the economic recovery in the Eurozone are expected to boost housing demand. However, the ongoing mismatch between supply and demand, coupled with limited room for negotiation, suggests that property prices will continue to rise at an average rate of around 5% annually over the next few years. That said, the growing gap between asking and closing prices could impact the number of transactions, especially if buyers become less willing to pay inflated prices.

Both buyers and sellers should closely monitor the latest market data. The second-quarter data for 2024 is expected to be released in early October, and these figures will provide further insights into whether the current trends will continue.

Whether you’re looking to buy or sell, understanding these pricing trends will help you make informed decisions in Marbella’s evolving property market. For expert advice and guidance, Move2Marbella Real Estate is here to assist you at every step of the process.

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