2021 saw a solid increase in property values in Marbella and surrounding areas. Not surprisingly, as it was a bumper year for the region’s real estate market – especially within the upper segment, which saw a record value of transactions.
According to research published by Knight Frank International, property values rose by 5% during 2021, a figure that provides the average for the market as a whole, but which reads differently for distinct market segments and areas.
Following the trend of the past few years, new-build modern villas and apartments for sale in Marbella and surroundings form the focal point of the strong demand for the Marbella way of life, which led to an all-time record not in the number of property transactions completed in 2021, but in their overall value – a factor caused by the strength of the higher end of the market.
Demand for older existing homes in Marbella with more classical design and fewer technological mod cons is not quite as strong, and faced with a great deal of supply, which resulted in more muted price growth. However, where the overall average increase in property prices in Marbella was 5%, the shortage of available new luxury housing stock and of freshly renovated older properties is such, relative to demand, that in this all-important segment values have risen by as much as 15% or more.
Demand over supply
This is especially true of top areas such as the Golden Mile, where supply is so short that any new villa or development is quickly snatched up and buyers even enter into bidding wars. Other luxury residential areas in Marbella, such as Sierra Blanca, Guadalmina, Nueva Andalucía and Los Monteros, and the likes of La Zagaleta and El Madroñal in Benahavis, has also seen a steady rise in values, while the greater supply of newly built homes in Marbella East and Estepona provide a greater volume of sales at more limited price increases.
Prices are also affected by the rise in overall inflation and the cost of construction, where especially materials had until recently been going through the roof. This trend has eased considerably in recent weeks, and there seems to be relief in sight for builders and developers keen to get on with the job of providing the market with the luxurious modern homes there is such strong demand for.
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