It's been over a year since Covid-19 emerged and 2020 was a year like no other.
As we progress through 2021 let us tell you why we're feeling positive about the future of the Costa del Sol property market.
Revaluing life - If anything good has come out of this pandemic, it's that people have revalued their life and shifted their priorities. Many didn’t realize how difficult it was to live in so few square meters until the lockdown and have subsequently decided to move out of the bigger European cities to larger homes with more light in more desirable locations with the space to work remotely.
Strong foundations - the real estate market in Spain has much stronger foundations that the previous 2008 crisis. Prior to the pandemic Spain's households and economy was in a much healthier position than it was 12 years ago. There was no oversupply on housing and banks have been much stricter on their criteria for lending.
GBP to rise - we expect the strength of Sterling against the Euro to continue to rise based on the UK's speedy vaccination program. This is giving British buyers the incentive to take advantage of the rate and start the moving process to sunnier climes.
Household savings - Many households have significantly improved their finances after being forced to stay home by the pandemic.The UK household savings ratio for example has increased from 9.6% in Q1 2020 to 29.1% in Q2 and, according to American credit rating agency Standard & Poor's (S&P), an average of about 25% of household income has been saved in the Euro zone.
Proptech innovations - International buyers, are relying on viewing properties virtually, at least until travel restrictions are lifted, and even when they are, virtual 3D tours will become an increasingly popular way of filtering homes currently on the market. The in situ viewing makes the whole process so much more time-efficient for homebuyers.
Enquiries - Traffic to our website and the property portals we advertise on is the highest it ever has been with buyer intent at an all time high.
In our experience the demand is there, just waiting for the lights to go green. We are not expecting to see any sharp reversal of prices in 2021, at least not across the board. Of course, there will be some forced and motivated sellers, it’s inevitable. However, we think it will be on a case-by-case basis rather than a wholesale dumping of stock. Finding out the reason behind a sale will be an important part of the buying process in 2021. Prices drops are more likely to be in the new-build sector as new-build prices were already unsustainable and completely out-of-sync with the overall market and it may be that the pandemic will be a turning point.
Our advice to buyers in 2021 is not to obsess about new-builds, especially if not located in prime positions. Most are not. You are better to consider equivalent resales, calculate the price per sq.m. to include any renovation if it’s needed. Then you can take an informed view on what makes the best financial sense. The result will almost certainly be a lower price, a bigger property and, most important of all, a superior location.
