Like many parts of the world, the Costa del Sol has lived through its fair share of booms, crisis and recessions. Most were of a purely economic nature, but the latest Covid-19 experience is something altogether different—so what will its impact on the Marbella property market be?
Quite unlike the cyclical economic ups and downs, which come with their own associated features, such as overheated and overpriced markets, gluts of supply and related problems, this is a situation entirely different in origin and character. The Covid-19 crisis created a lockdown during which movement was so restricted that many businesses simply closed and ceased to operate. Others, who could work remotely and didn’t need direct contact with people, could continue well enough, but collectively the result has been not a slowdown in business activity caused by economic and financial drivers, but a mechanical cutback in output and earnings resulting from physical barriers.
Not an economic crisis in itself
The result is a period of nearly three months that was largely lost to the economy and personal income. That said, since there was no economic reason behind it, the bounce back has been strong ever since the Spanish government began gradually easing the restrictions, allowing people to move more freely and also businesses to open again. With the announcement that Spain’s borders will open to tourists and other travellers again from June 21st, a three-month hiatus comes to an end and we’re almost back to normal. Property agents, restaurant owners and other people in business have been noticing a strong local and international response, showing demand remains solid.
So, while the figures for the local, national and global economy will not be that pretty this year, and much of the remaining months will be focused upon recovery, this is not an economic crisis in the traditional sense, since it was a pandemic and not a financial crash or recession that caused it. For this reason the recovery will very likely be strong too, and many already forecast strong growth for 2021 and a solid period of build-up leading up to it. Estate agents and property portals such as Rightmove are reporting the same kind of market reaction as hotels and booking sites, namely that online searches for the Marbella area are booming along with enquiries and bookings.
• The current situation is not the result of a financial or economic crisis, but comes from the unforeseen closing of sectors of the economy for over two months
• The reaction to the opening of restaurants, hotels, businesses and the border to tourists has been strong. Demand from across Europe, including the UK, is leading to a boom in holiday reservations and property enquiries
• The lockdown has caused many to rethink their holiday and lifestyle choices, and there is now a greater focus on space, privacy, gardens, views and enjoying a safe, pleasant environment such as the Costa del Sol. This is feeding back into demand for Marbella and surroundings
• Growth is predicted for 2021, with decent fundamentals such as the lack of an overheated market, though the property sector will have to watch supply doesn’t overtake demand, and guard against overpricing.
As long as these conditions remain under control, the demand for Marbella and the Costa del Sol is solid.