Festive Cheer for Costa del Sol Property Market
As the countdown begins to Christmas, our minds are starting to become distracted by pleasant festive thoughts. But first some serious business on the real estate front… By all key measures of the property market in Spain – and specifically the Costa del Sol – the news has been particularly good in 2016.
As BBVA Research summed it up in their latest report on the second half of the year, “Residential demand holds firm. Sector expectations turn positive. New building continues to grow. Housing prices will rise again in 2017.
“Improving sales in a context of declining inventory is leading to a gradual appreciation of housing prices. In a frame of declining assets returns, the rise in house prices is creating positive price expectations, which will become an important driver of future housing demand.”
Housing Starts
Noting that demand had now experienced 10 consecutive quarters of year-on-year growth, the research department said this positive trend had led to a revival in building activity. “Housing starts are at their highest level for the past few years. Since touching bottom in 2013, the number of building permits has increased by more than 50 per cent… Looking ahead, everything points to the growth trend continuing in 2017.”
They predicted an increase of around 6.5 per cent in the number of sales for the year, bringing the total close to half a million. “Also, the dynamism of sales in a context of falling stocks will translate into an increase in the average price of housing in 2017, of about 3.5 per cent. The market will react to these developments with an increase in the number of housing projects, leading to nearly 100,000 housing starts.”
Residential Demand
BBVA Research said forecasts pointed to 2016 closing with growth in housing sales similar to that of last year, around 10 per cent. “In the same way, housing prices will end the current year on a positive note, with average annual growth of around 2.5 per cent. For 2017, this increase will be around 3.5 per cent. In this way prices are gradually recovering from the fall of just over 38 per cent suffered during the crisis. Thus by the end of 2017 we expect housing prices to be at a similar level to that of mid-2004.”
In general terms, the research department noted that the real estate industry’s recovery was now well consolidated. “We expect the sector to continue its advance towards normalisation in the next few years. It will do so at different speeds, since the residential market will continue to show marked disparities among regions… in Spain, the sector’s recovery is led by Madrid, the Mediterranean coast and the islands.”
One major initiative officially unveiled on the Costa del Sol this week provides tangible evidence to support BBVA Research’s optimism. Round Hill Capital announced that it would invest €250 million to develop a luxury housing estate just four minutes from the La Cañada shopping centre in Marbella on the outskirts of Ojén. Located on the outskirts of Ojén, Palo Alto will be built on 50 hectares, of which 40 per cent will be comprised of green open space. Ójen mayor José Antonio Gómez Sánchez said Palo Alto would be an important project not only for
Ojén but for the whole of the Costa del Sol, as “it will invigorate the area, both socially and economically”. Architect Matías Villarroel added that the development’s slogan, “Naturally Modern Living”, reflects what they want to achieve at Palo Alto, which has been named in honour of the pinsapo tree, a native species in the area that will surround the development.
Featured here is one of the Palo Alto apartments, priced at an excellent €641,685.
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