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Buying and selling property in the Marbella area during the coronavirus crisis: a market perspective

By Christopher Clover, Managing Director of Panorama Properties, Marbella’s longest established real estate agency, celebrating 50 years in the city.

There are a lot of questions to be answered:

How is this crisis different from that commencing in late 2007?
Will the lockdown end in a relatively short order?
When will international tourism resume?
Will non-resident owners be able to use their homes here in the near future?
What is the demand for higher-end properties in the Marbella area?
What about prices?

Let’s take a look…

Together with the Panorama Team, I have been studying all the likely scenarios regarding the future of the property market since the week before the Spanish lockdown on March 14, and I wanted to share my perspectives on the Marbella property market based on the information currently available.

Our ideas and recommendations are evolving on a daily basis, so anything we say now might change in accordance with current events and government actions. We will update you as our perspective evolves.


How is this crisis different to that of the prior one starting late 2007?

In spite of this historic shock to the world’s economies and the expected economic recession,
banks appear to be in a relatively strong position, as well as many, if not most, of the property developers.

  • The market is nowhere near overheating, as it was in the years prior to 2008.
  • Prices in the Marbella area (except for prime and ultra-prime properties) have not reached pre-2008 highs.1
  • Many have earned and saved a lot of money since the last crisis. Wealthy buyers will seed a demand, in most cases, for very well-priced properties.
  • Although opportunity seekers have plenty of cash and are ready to pounce, many of them will be disappointed, since Marbella has a tremendous number of well-off owners who are in no rush to sell at drastically reduced prices.
  • The main reasons for buying property in Marbella, namely the beautiful climate and lifestyle, have become even more important to people now than before the coronavirus crisis began.


Tourism has stopped dead in its tracks, creating the biggest immediate challenge to our industry

When will the Spanish borders open to international tourists again?

Currently Spain is in the process of gradually opening up after lockdown commenced on March 14, and is scheduled to end the final lockdown phase at the end of June.

There were many articles in the Spanish press in April indicating the possibility of actively restricting tourism this summer to Spanish tourists only, and maybe even until the end of the year, as a preventive measure to avoid a possible “second wave” of coronavirus infections.3

President Sánchez announced on April 26 that the measures were being studied to allow foreigners to return to use their holiday homes thereby allowing another type of tourism, that known as “residential tourism” to continue, albeit with the same restrictions as those continuing throughout the country.4

On May 13 further hope was given to the tourism industry when the European commission proposed a program called “The Commission package on tourism and transport in 2020 and beyond” which is composed of three guidelines and a recommendation to help EU countries gradually lift travel restrictions, giving hope that there might be some tourism from outside Spain this summer. 5

And on May 23, President Sanchez finally announced that the country will be open for national tourism in June, and for international tourism in July, bringing excellent news not only to the tourism industry, but to the Marbella real estate sector which is largely dependent on foreign investors.

Safety is a key element of the tourism restart, Sánchez told a press conference. “Spain needs tourism and tourism needs safety … We will guarantee that the tourists won’t be at risk and won’t bring any added risk to our country.” The current two week quarantine for anyone entering Spain now, will end on 1st July.6

Spain is planning a government certification scheme for Covid-compliant tourist establishments. Hotels, restaurants, tour operators and others will get some sort of corona-safety stamp of approval. The government will soon announce more details of the health protocols for the travel industry.7

This announcement unfortunately has come too late for many. We know of many potential clients from northern Europe, the Middle East and Eastern Europe, as well as many owners, who have already made other plans for their summer holidays when the government originally announced in April the likelihood that foreign tourism would be excluded this summer.

Additionally, with the details of the implementation of the plan not yet revealed, the new health protocols themselves might discourage many travelers, as well as the fear of catching the virus on airplanes, in spite of safety measures.8

Because of the above it appears to us at this point in time that international tourism will return to the Marbella area very gradually throughout the rest of the year, with 2021 faring much better.
The important thing is that this crisis, as all of the crises of the last century, will also pass. The cards are stacked against the virus, and it is only a matter of time before it is controlled, or indeed eradicated. In the meantime, we are going to have to put up with a lot of state mandated inconveniences to protect ourselves and others.

How has the market behaved during lockdown?

Clearly, without the ability to physically view homes for over two months, and with no international visitors allowed, the number of sales has dropped severely.

Over the past two months, Panorama has seen some buyers put ongoing deals on hold, but there are, interestingly, very few cases of sales being cancelled or deposits being forfeited, not just according to our own experience, but also to that of our many agent friends and property developers. As might be expected, many are adopting a “wait and see” approach while some have made adjusted, lower offers, and many owners have shown themselves ready to negotiate.

While Panorama has made several sales during the lockdown period, most were to buyers who viewed the properties before lockdown was enforced, with the exception of a few clients who had virtual tours of a property in a complex they already knew well. We are reading of other virtual tour sales being made not only in Marbella but also in other parts of the world and we expect more sales of this nature in the coming months.9

By how much will sales volume drop this year?
With very few sales during the lockdown coupled with the unknown factors affecting the return of travel and foreigners to Spain, the annual number of property sales in this area will be drastically affected this year. However, there have been sales made and all major agents are reporting a pent-up demand of foreigners waiting for the lockdown to end so they can travel here to inspect properties.10

Given the dependence of Marbella on the foreign market our educated guess at this point for sales volume in Marbella, Estepona and Benahavís, is they will most likely drop by 25% to 30% this year, to reach the same levels of 2012-2013.


How long will market recovery take?

While recovery may take some time, it is unlikely that we will be facing the same scenario as that of the last crisis where the market took more than four years to touch bottom before starting to recover. Barring no second-wave of coronavirus and counting on a vaccine, or at least an effective treatment in the next year or so, we believe it will take up to two years for the local property market to regain the same sales volume we had before lockdown began. This is an approximation which is backed-up by many other professionals in the industry, keeping in mind that market recovery is in good part, economy dependent, and that we are in unchartered waters.11


Where are prices headed?

Resale Properties

In the following paragraphs, we distinguish clearly between “asking prices” and real after-negotiation sales values.

Owners who want to sell their property within the next few months should carefully analyse their “asking price”, and adjust it in the light of the present state of the market. The single most important factor in selling a property (in any market) is to get the asking price right.

The market for resale properties in resort areas has never been a particularly fast one, other than for exceptionally well-located and well-priced properties. Under normal market conditions, properties can, and do, take up to a year (or more) to find the right buyer.

With the current crisis, potential buyers are naturally expecting prices to be lower. This is simply an example of the classic law of supply and demand at work.

Adjustments to the asking prices of properties by owners who want to sell their properties in the next year might need to be anywhere from 10% to a more hard-hitting 15% or even 20% (or more) for seriously overpriced properties. Some properties, however, may not require any asking price adjustment at all.

Adjustments in asking prices depend on a number of variables:

  • Whether the property is overpriced, or realistically priced, in the first instance. Those owners who want to sell in the next year must make sure that their asking price is reduced to the level where it is perceived by buyers as a good deal.
  • Properties in prime locations will be in more demand. Properties in less desirable areas will most likely need stronger adjustments.
  • The quality of the construction.
  • Whether the property has recently been refurbished, and most importantly
  • The strength of the owner’s desire to sell.

Once an asking price has been adjusted with the advice of the owner’s agents, there should also logically be a margin left for negotiation.

About 35% of the owners with whom Panorama has been in touch in the last couple of months have adjusted their asking prices. The average reduction of asking prices we have witnessed has been close to 11%. Also, almost all owners will listen to reasonable offers.

There is a strong but unrealistic perception from buyers today that all sales prices will be heavily reduced. This will no doubt increase the slowdown in sales until there is a better match between buyer and sellers perceptions on real market value. Of course, there will be some real bargains available from those owners who have decided that they must sell this year and have adjusted their asking price accordingly, and are open for offers.

There is nothing to stop buyers asking for more aggressive discounts, but they will have to remember that the Marbella area is comprised, for the most part, of relatively well-off property owners, which is one of many factors which distinguishes it from the rest of the country. In the luxury market, potential buyers should be prepared to see many sellers refuse low offers, even in these extraordinary times.

For those owners who prefer to wait, we believe it is a waiting game which will take well over a year. Some owners will no doubt also consider renting their properties on a long-term basis to well-qualified tenants.

How much are resale property values (not asking prices but real sales values) going to drop this year with respect to luxury Marbella property in the Marbella area, compared with pre-coronavirus property values? Based on the positive factors analysed later in this article, and the various publications and surveys by other professionals, we are estimating a real sales price decrease this year somewhere in the region of 5% to10%. In some high demand areas, less. In less desirable areas, perhaps more.

In a summary of various studies of different areas around Spain, by the national newspaper Expansion, a price decrease in Marbella of up to 6.5% was estimated.12


New properties

Some new properties under construction will see developers reduce their prices to sell now, rather than later. However, given the strong financial position the developers have now we have seen and read many interviews with developers who have stated they intend to wait patiently until the market improves. In this respect, these are some of the points to consider:

Those areas where there is clearly overbuilding of new developments (such as in Estepona where supply has been outstripping demand for the last couple of years), will most likely have a few projects that will be “best buys”, but care needs to be taken here as the strongest and best developments are most likely to be less willing to negotiate very much on price.
Almost all of the new developments are aware that they have to be competitive. Many of the better developers have stated that they have no intention of heavily discounting their prices, but will certainly offer some leeway in price, and possibly negotiate with respect to extras and payment terms.
New projects which might be suitable for first residences, either for the local and national markets or the foreign market when it is able to return, will perform substantially better in sales than those which are comprised of properties destined for holiday use.
New developments which have higher quality finishes and facilities and located walking distance to amenities will no doubt also fare better.
We believe it is too soon to estimate the percentage of decrease in real sales prices of new developments, and it will be interesting to discover how many of them become great opportunities for investments within the next few months. What is clear is that with less foreign clients travelling to this area, demand will be weaker and sales will be slower.13
The local and Spanish markets will be the most active in the coming months

The local market: There is an ever-increasing number of potential buyers of all nationalities who already live full or part-time in Marbella, either in rental properties or properties which they already own, who will not be affected by travel restrictions. Marbella has a census population of 150,000, to which at least 100,000, must be added on account of the floating or unregistered, off-season residents. Some will undoubtedly be actively looking to buy in the coming months, in order to upgrade their properties, or pick up well-priced properties for investment purposes which some owners may need to sell to obtain liquidity.

The Spanish holiday home market: The certain return of national Spanish tourism to our area this summer, in large, maybe even record numbers, is likely to mean that there will be a significant increased interest in purchasing homes here by those Spanish buyers less affected economically by the crisis.
Spaniards, who historically represent the very foundations of the Marbella property market, have been less present in the market since the crisis of 2008, and we will welcome their return with open arms!14


Reasons for optimism

Prospective Buyer Enquiries

In the 30 days preceding the publication of this report (June 2, 2020)), Panorama’s enquiries from potential buyers were down only 2% from the same period last year. This is very encouraging news, drastically different to what we experienced in 2008, where buyer enquiries virtually disappeared for months on end. Many of our colleagues are reporting the same results.

An unusual number of potential buyers, international as well as Spanish, are honing in on small details of specific properties that we are offering for sale. This indicates an extremely strong motivation factor, which we have seldom seen in the past.

As further evidence of the “pent-up” demand mentioned earlier, Panorama agents have accompanied prospective clients on a substantial number of property viewings since the “state of alarm” restrictions were relaxed on the 18th of May, even though tourism and travel from outside the province is still not permitted.

New criteria are being manifested by potential buyers

  • As the world starts to enter the post-Covid-19 lockdown, there will be more buyers wanting gardens (to feel grass under their feet!) with pools and properties with large terraces, after so many weeks of being confined to the walls of their homes. After all, life in Marbella has always been about inside/outside living, and there will be those who decide that their present homes are unsatisfactory, and now is the time to change. The question arises – where would you like to live if there is another lockdown?15 There is even speculation that properties especially in demand might even see increases in price.16

  •  Many property owners in Marbella are already used to working from their homes here, whether their businesses are located elsewhere in Europe or even in Marbella itself. The result of the lockdowns around the world could well be that many more people will feel more comfortable with the idea of working remotely in the future and give increased urgency to their lifestyle goals. As a result we have no doubt that many will make major lifestyle changes quickly and decide to buy a second residence or semi-permanent home in our lovely low-density, garden-city of Marbella with its unique lifestyle which has made this area so popular for more than six decades.
  • There will be other potential buyers who have considered the possibility of buying a home here for years, and after having suffered this lockdown will now have the courage and motivation to proceed with their plans. This demand will be especially evident in the best residential locations and for exceptional properties.
  • The contagion rate of coronavirus in Marbella has been five times lower than the national average17. The mortality rate from coronavirus on the Costa del Sol has been three times less than the overall rate for Andalucia and an amazing 14 times less than the national average in Spain18. In addition, Marbella offers a remarkable health-care infrastructure that must be taken into consideration, with private hospitals and clinics that highlight the extraordinary safety of the area.


Marbella will endure and adapt

Despite what will be very difficult months ahead in the Marbella area property market, we have a clear perspective, a firm vision and absolute confidence that a healthy property market will return in the medium term. Although nothing will be quite the same in the post-Covid-19 world, Marbella will not only endure, but will adapt to new circumstances, and prosper.

The extraordinarily positive factors making Marbella so spectacular include, more than any other single factor, the interesting and accomplished people from all walks of life, from all over the world who have chosen the Marbella area to live all or part of the year, enjoying a 12-month season which is unknown elsewhere in Europe. Marbella’s strength is that there is nowhere else that offers quite so many advantages within the borders of Europe. This is precisely why we established our agency here in 1970.

Over these past 50 years, Panorama has faithfully and successfully served buyers and sellers through many economic crises. Even though this crisis is different, I believe that Panorama is uniquely qualified to counsel our clients and facilitate successful brokerage, especially in times like these.

©2020 Christopher Clover, Panorama Properties SL



1. Fomento: Valor tasado de la vivienda
2. El País: El turismo afronta el peor año de su historia, 19.04.2020
3. El País: El Gobierno planea una recuperación de la actividad en dos fases,17.04.2020
  Marca: Spain will not allow tourism, culture or leisure until Christmas, 18.04.2020
4.UH Noticias: Sánchez, ante la petición de alemanes con segunda residencia en Mallorca, 25.04.2020
5. European Union: The Commission package on tourism and transport in 2020 and beyond, 13.05.2020
6. El País: Spain will lift two-week coronavirus quarantine for overseas arrivals from July 1, 25.05.2020
7. Forbes: Spain Travel: Here’s How World No.2 Destination Wants Tourists Back, 23.05.2020
8. Financial Times: Aviation industry prepares for sweeping changes in post-pandemic travel, 25.05.2020
9. Idealista: Extranjero paga casi 7M por una casa en Londres tras realizar una visita virtual, 27.04.2020
10. Bloomberg: Loaded With Cash, Property Buyers Wait for Sellers to Crack, 19.05.2020
11. El Diario: El sector inmobiliario volverá a estar en un año a un 80% de su actividad anterior, 11.05.2020
12. Expansión: ¿Qué va a pasar con los precios de la vivienda de costa?, 10.05.2020 /
     EDeconomíaDigital: El precio de la vivienda caerá pero “no se derrumbará”, 20.04.2020
    Aura: Luxury House Prices to Fall by 4% in Madrid and by 2.5% in the Rest of the World, 05.05.2020
13. Idealista: Las principales promotoras residenciales ya han abierto sus 250 oficinas de venta, 11.05.2020
14. Bloomberg: Spanish Homebuyers Tired of Confinement Seen Fleeing Cities, 14.05.2020
15. El País: El éxodo inmobiliario que viene tras el virus: de la ciudad al campo, 02.05.2020
      Idealista: De la urbe a la ‘urba': los españoles, más interesados en abandonar la ciudad, 22.05.2020
16. Idealista: Los tipos de viviendas que podrían subir de precio en plena crisis del coronavirus, 29.04.2020
17. Diario Sur: La alcaldesa de Marbella, indignada con la decisión del Gobierno sobre Málaga, 08.05.2020
18. Diario Sur: Todos los indicadores de Covid-19 Costa del Sol mejoran la media española, 12.05.2020