The Booming Real Estate Market in Marbella

The Booming Real Estate Market in Marbella: What You Need to Know

Marbella continues to shine as a premier destination in the global real estate market, drawing in investors worldwide. Thanks to its luxury properties, stunning landscapes, and unbeatable lifestyle, Marbella has become the go-to place for those seeking high-end real estate in Spain.  At the heart of this vibrant market are the experts at Move2Marbella, led by Zsolt Mihaly Horvath, the owner and managing director, and Regan Berger, the managing partner. They have over 25 year’s experience in the Marbella real estate market, and together they provide unparalleled expertise, ensuring that every client finds their dream property.

Andalusia’s Real Estate Growth: A Closer Look

The Andalusian housing market has been on a consistent upward trajectory. According to the Ministry of Housing, property prices have been rising for the 13th consecutive quarter, reflecting the region’s resilience and attractiveness to both domestic and international buyers. In the second quarter of 2024, property values reached an impressive €1,589 per square meter, marking a 7.5% increase from the previous year. This sustained growth highlights Andalusia’s position as a real estate hotspot, particularly in key locations like Marbella.

An 80-square-meter apartment in Andalusia now averages €127,000, a significant jump from €103,680 in 2021. Marbella, however, stands in a league of its own. With prices skyrocketing to €3,394 per square meter, the city has solidified its position as the most expensive location in Andalusia. For instance, an average 80-square-meter apartment in Marbella is now valued at €271,000, making it a hub for luxury real estate.

Marbella’s Unstoppable Real Estate Market

Marbella's luxury market remains strong despite rising interest rates and global economic shifts. Interestingly, less than 10% of high-end property transactions in Marbella involve mortgage loans, as most buyers come prepared with the necessary capital. In this thriving market, it’s common to see properties with asking prices of over €2 million, a testament to the city’s high-end appeal.

The luxury real estate sector in Marbella, notably the Golden Mile and Nueva Andalucia, continues to attract high-net-worth individuals. Buyers from across the globe are drawn to the area’s exclusive properties, incredible lifestyle, and the promise of solid returns on investment.

Marbella has achieved world-wide recognition as a 5-star resort destination and one of the first cities to attract “residential tourism”, with European buyers taking advantage of the excellent communication links to almost all European cities. After over 30 years of living and working in Marbella, we see that the “low season” of the winter months has virtually ceased to exist.

Local Disparities and Growth Patterns

While Marbella leads in luxury real estate, other cities in Andalusia are also experiencing sharp price increases. For example, Málaga, just a stone’s throw from Marbella, has seen a 9.8% year-on-year increase, with property prices now averaging €2,400 per square meter. Meanwhile, cities like Benalmádena, Estepona, and Fuengirola are also witnessing strong growth, with property prices increasing by 18%, 13.5%, and 16.8% year-on-year, respectively.

These regional disparities make Andalusia’s real estate market both dynamic and competitive. Cities along the coast, especially in Costa del Sol, are seeing the highest demand. This demand is pushing prices up, but it also creates excellent opportunities for investors looking to tap into both luxury and mid-range properties.

The market share has shifted in recent years. There is a decline in the number of British property buyers, likely as a result of the Brexit situation, although the tourism figures for the UK remain the highest of all nationalities visiting Spain. However, the loss of the British buyer has been more than made up by the significant increase in North American and Middle Eastern buyers. Both these markets have seen over a 10% increase in property purchases in 2024. The popularity of the Costa del Sol is evidenced by the passenger traffic at Malaga airport which has broken all records and recorded over 11 million passengers in the first 6 months of this year. 

Luxury Market Insights for 2024

The first quarter of 2024 showed impressive sales figures, with Marbella, Estepona, and Benahavís recording over 8,200 property sales. Despite global economic challenges, the demand for luxury properties in Marbella remains robust, with sales in the luxury segment (over €2 million) continuing to thrive. Marbella’s real estate prices have increased by 13.7% between June 2023 and June 2024, reaching an all-time high of €4,812 per square meter.

Asking prices for luxury properties in Marbella vary, with refurbished apartments starting at around €6,000 per square meter and new or refurbished villas reaching up to €14,000 per square meter. The Golden Mile and beachfront properties command even higher prices, sometimes exceeding €30,000 per square meter for unique, one-of-a-kind properties.

Marbella – not only a destination for the Wealthy

Although Marbella has gained a reputation as a luxury destination, it is important to note that its popularity is not just restricted to the affluent. People from all walks of life choose this part of the world as their preferred residence, as it offers an unparalleled quality of life.  Advances in technology have enabled many to live here and still continue the jobs or businesses they have abroad.  The Spanish government has recognised this trend and are now offering “Digital Nomad Visas” that offer attractive tax advantages

The Role of Move2Marbella Experts

In this fast-paced market, having the proper guidance is essential. The Move2Marbella team, led by Zsolt Mihaly Horvath and Regan Berger, offers clients a deep understanding of the local market dynamics. Their expertise ensures buyers and investors are well-informed about the latest market trends, price fluctuations, and opportunities. Whether you are looking for a beachfront villa or a modern apartment in a prime location, their knowledge and experience are invaluable.

Their focus on client satisfaction and market insight has made Move2Marbella a trusted name in the region. From helping international clients navigate the complexities of property transactions to offering expert advice on high-value investments, Zsolt and Regan are committed to providing top-notch service.

Investment Opportunities in Marbella

For investors, Marbella offers a unique blend of lifestyle and financial opportunity. The ongoing price increases and a lack of supply make this the perfect time to invest in the region. Despite the rising costs, Marbella remains competitive globally, ranking 13th in the 2024 Knight Frank Wealth Report.

Luxury properties in Marbella offer a lavish lifestyle and excellent investment potential. As supply continues to diminish and demand remains high, prices are expected to rise even further. This presents a unique opportunity for those looking to invest in Marbella’s thriving market.

The Rental Market

The long-term rental market has quite simply never been stronger (long term = minimum 6-month contract).  The demand far outstrips supply and properties offered for long term rent (at a correct market price) are often snapped up within days, with on average, over 30 applicants per property. This is somewhat regardless of price category, as (especially since Covid 19) there has been some unique situations which has made the rental market boom. One of these is the war in Ukraine, which has resulted in a significant number of Ukrainian nationals seek to live in Spain.  The demand has forced prices higher with the average rental cost of a 2 bedroom apartment in Marbella now being marketed at on average 1.500€ per month. Another affect has been the significant increase in short term rental properties.  The buoyant tourist market has created even more demand and many owners have switched from renting long term to short term.  This, in turn, has created a bit of a backlash from the domestic Spanish market, that now see themselves as being pushed out as rental costs become unaffordable.  There have been public demonstrations in some of Spain’s major cities like Barcelona, Madrid and Palma de Mallorca, protesting against rising rental costs. The government and local authorities have reacted to these demonstrations, and now some areas are prohibiting short term rentals. This has also occurred on a smaller scale with individual residential communities now prohibiting tourist rentals. If you are considering investing in this buoyant market, it is essential that you ensure that it can be rented out without a problem.  Move2Marbella can give updated and correct professional advice on this problem – help you define the right property, obtain the tourist license on your behalf and then market and rent the property.  Some of our clients have achieved incredible success in the short term rental market, with some properties generating over a 10% annual return.

Conclusion

The Marbella real estate market is one of the most dynamic in Spain, and with the expertise of Move2Marbella led by Zsolt Mihaly Horvath and Regan Berger, buyers are in safe hands. With property values rising and the region’s luxury appeal remaining as strong as ever, Marbella is set to maintain its position as a top destination for real estate investment.