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Marbella Property Market - The Top End Wears Teflon

When scandals of drug abuse broke in 2005, not to mention a turbulent relationship with shambolic rocker Pete Doherty, many feared that Kate Moss’s lucrative supermodel career would go into freefall. However, the 2007 Sunday Times Rich List shows that her wealth has been boosted rather than dented and is now valued at £45 million. The girl appears to be invincible. Spain’s very own Kate, the glamorous but flawed Marbella, has also been noted for its scandals, but it too continually comes up smelling of roses.

A succession of Marbella Mayors and Mayoresses from Gil through to Muñoz and most recently Yagüe have been carted off to prison for corruption. Operation Ballena Blanca followed by Operation Malaya I, II and III have each uncovered tangles of bribery and embezzlement involving everyone from lawyers to businessmen and of course, sleazy councillors, so much so that in April 2006 the entire town council was suspended. Angeles Muñoz, elected in May 2007, is Marbella’s first Mayoress from a mainstream Spanish political party, Partido Popular, in years and only now can the town breathe a collective sigh of relief and start to move on. The new PGOU (Plan General de Ordenación Urbana or General Plan of Urban Development) can be implemented and tales of unlicensed building can become distant memories. So how have these turbulent years littered with scandal and intrigue affected the property market?

Paul Rossiter, Managing Director of Costa del Sol based specialist land and self-build agency, Carrington Estates, comments, “I think the bottom end of the market, the ‘stack them high sell them cheap’ two bed two bath identikit end of the market has had a big wobble, but conversely the top end villa market has remained steadfast throughout. Even when Spanish property stocks took a pounding in April, with shares in an overnight freefall, there was still no knock-on effect to this sector of the market. As a business, Carrington Estates has sold a greater value of real estate in the first half of 2007 than we did in all of 2006 – fact. Our most popular resorts, namely Monte Mayor Golf & Country Club and La Zagaleta, have both experienced an unprecedented demand for plots and resale villas, both outperforming 2006. It seems that if you have reasonable wealth and you find something you like, you’ll buy it. Fluctuations in interest rates, exchange rates don’t enter the decision-making process. Likewise the adverse press hasn’t put people with money off; they’re not so easily fooled by sensationalist journalism and see it for what it is. In fact many feel safer making a purchase in today’s climate as contracts and licenses are being double and triple checked by fastidious lawyers.”

There are a few points that the commentators have failed to clarify. Marbella is only Marbella. The aforementioned resorts of La Zagaleta and Monte Mayor Golf & Country Club fall under the town hall of Benahavís. The misdemeanours of Gil et al bear no relation to Benahavís or any other Andalucian town hall. Additionally, the gloomy coverage has chosen to focus on the flawed ‘bottom end’, citing distressed vendors trying to offload indistinguishable apartment units to be symptomatic of the market as a whole. Whilst many are faced with such a predicament, due to an oversupply and some overpricing, they are the minority and a healthy market exists higher up the ladder, but that of course doesn’t make headline news.

The stock market correction was exactly that, a correction of property share values largely triggered by Astroc, a Valencian based developer, when it was revealed that a large amount of their 2006 profits resulted from assets being allegedly sold to the company Chairman. The offloading of Astroc shares had a domino affect on the share price of other large Spanish developers and the instability was short-lived, easing in a matter of days. Lastly, and most fundamentally, the Costa del Sol is a long established, tried and tested area known fondly to many members of the British public for decades. Whilst at the bottom end of the property market purchasers have been tempted into the emerging markets and prepared to take low-budget risks, the top end is unimpressed by the risk and also the complete lack of luxurious, gated country club communities in countries like Bulgaria for example. Nowhere betters the Costa del Sol for sunshine, golf, shopping, infrastructure and short haul accessibility. Change the latitude, and the Costa del Sol may have that catastrophic property crash that some observers predict, but they’ll have a long wait.

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