With the number of transactions we are having and with the inventory going down, prices were bound to go up following the general rule that more demand and less offer leads to higher prices. That is exactly what is happening in the market of Marbella and Benahavis, prices are going up and this can be seen on the charts. There are two lines for Benahavis (Chart 2): The price per square meter published by the real estate portal Idealista that can be identified as “for sale” or “asking” price (green) and the price per square meter obtained form the Land Registry that can be identified as “sold” or “closed” price (blue).
Additionally, in the chart for Marbella (Chart 1), there is a third line that is the average price per square meter obtained from official valuations, published by the Ministry of Housing (red).
GRÁFICO 2 - NÚMERO DE VIVIENDAS VENDIDAS EN BEHAHAVÍS 2º TRIMESTRE 2021
Regarding Marbella, it can be seen that the asking price is sky-rocketing, with owners asking more and more for their homes, while closing prices are also going up, already 13,6% in the last year, but with a “softer” increase. There was a moderation on the tendency in 2020 but the increase is starting to accelerate again. In any case, it will be seen, with the detail in Benahavis, that most of these increases are driven by the selling prices of new built homes. A final comment on the valuation prices of Marbella that are always below the closing prices and, in a similar way, following an upward tendency.
The prices in Benahavis are also following the same path, in this case reaching an extreme increase in closing prices of 18,3% in one year. This can be seen as good for now but I think it is too much for the future. The market will not withstand yearly increases of 18% and it can destabilize it if it keeps on growing at that pace.
Finally, just a comment on the increase of the prices, as mentioned above, driven by new built units. Chart 3 shows the closing prices of second hand homes versus new builds, highlighting that prices of new builds are increasing rapidly while prices of second hand units started to show increases in 2021 but at a slower pace than the new builds. Most of the demand is for new designs and there is also less inventory so prices are pushed up while there is less demand for second hand properties and more stock available so for the moment prices of second hand homes are not increasing as much.