With the Covid situation in full swing and soon to be celebrating its 1st anniversary, we can now look back on how the real estate market on the Costa del Sol did in 2020.
We can try to understand the impact of this situation on our economies and businesses in general and on the real estate market in particular.
With the restrictions on movement implemented in most of European countries, the Costa del Sol entered a phase of complete halt in March.
A lot of businesses saw their activities cease completely from one day to another. Surely, not all sectors were affected in the same way.
Some businesses even did very well. It all came down to how digitalised they were and ready for the online plan B. As days went by, it was clear that this situation was going to have serious impacts on our economies and businesses, especially if it were to remain unresolved for longer.
Most sectors were facing the same challenges and difficulties. How to adapt to the new situation and survive these crazy times?
As the Costa del Sol property market depends greatly on foreign buyers and investors, and with the strict travel measures, most buying and purchasing activities stopped in the 2nd quarter of 2020.
Clearly, there are always investors who wait for uncertain times like these to snap a good deal, wherever that may be.
Luckily, many companies took advantage of the confinement to get themselves up to date with digitalisation and put themselves back in the online presence game. From virtual tours, to videos and 3D photos, there was a lot to be done to catch up with how fast the real estate market was recently moving.
As far as how the market performed during the second half of 2020, we highlight these key points:
Construction and building works for new developments were forced to stop only for few weeks, to be given, at a later stage, the green light to continue as normal.
This meant that off-plan and under-construction projects were able to complete and deliver their units on time without having any serious delays.
Prices of new built properties didn’t see any drops or changes.
Few developments offered incentive packages for purchasing during this period, such as free furniture packages, free notary registration or free inspection flights etc.
The unchanged prices in the new built sector helped give the market confidence and strength to move forward, slowly but surely.
The resale market saw an increase in supply as more owners worried that the market could get affected by the situation and potentially drop as we saw in previous crises.
In few cases where owners needed liquidity and were very keen to sell, asking prices were negotiated anywhere between 5-15%.
According to Idealista, the Spanish property portal, there was an important increase in searches for houses with land, garden apartments or properties with outside space.
Rural and coastal areas had the most searches and they reckon that this trend will continue in 2021.
European buyers were still keen on purchasing properties on the Costa del Sol, more specifically in the event that there will be more lockdowns in the near future.
The main foreign nationalities that bought properties in the south of Spain during 2020 were Scandinavians and Belgians.
The summer months gave a positive push to the market with many buyers able to travel to view the properties they shortlisted during the lockdowns via virtual tours and video calls.
Investors who were not able to travel still managed to complete their purchases thanks to the advancement in digital technology that allowed them to view, inspect, get a mortgage, and complete the purchase process without setting a foot in Spain.
The rental market continued to boom throughout 2020, even during hard lockdowns.
The reason rental market did well on the Costa del Sol is due to the shortage in supply in rental properties in previous years versus the high demand.
Many people wanted to switch to a better property where they can be confined and/or work remotely in a beautiful sunny place such as the Costa del Sol.
Despite the fact that many holiday rentals moved to long term rentals, subsequently correcting the prices slightly, this gave even a bigger boost to the long-term rental market as many existing tenants who were thinking of upgrading/downgrading properties were very reluctant to do so in the past with the supply being very low and prices relatively high.
It was the perfect time for them to take advantage of all these new options on the market.
As we have completed the 4th quarter of 2020 and said goodbye to a crazy year, we are watching the vaccine reach our countries and hope for some positive change soon.
We can finally see some light at the end of the tunnel, and we are hopeful that spring will bring some improvements on many levels. Recovery will happen in different speeds and will depend on how effective the vaccine is and how our governments work towards saving and revitalising the economies.
To look at the full half of the glass, digitalisation of the real estate market has brought a lot of advantages to the sector in terms of transparency and time saving. Investors are now able to choose the properties they like, buy them, furnish them, rent them out and start making profit without leaving their desk.
Home buyers will be saved so much time and trouble as they will be able to shortlist the properties they like, have most of the process taken care of and only visit the few properties they want before deciding on their dream home.
As we all look forward to healthier days and economies, we are truly grateful and lucky to be living in this day and age where vaccines can be produced in a fraction of the time and we are able to make our dreams come home by a click of a mouse.
If you are looking for your dream property, check our latest listings in your preferred area. If you are an investor and would like a buy-to-let property already with tenants in order to start receiving return on your investment immediately, hit the button below, tell us what you need and we will send you the best options the coast has to offer.
