I would not like to look like a snob and defame the most popular real estate markets of Turkey and Croatia in response, but still, unlike them, there is already an established and constantly improving infrastructure on the Costa del Sol and life is in full swing all year. In addition, the local climate is exceptionally good, even by strict Mediterranean standards. Yes, real estate here is more expensive, but you pay for an exceptionally high quality of life.
What will follow the boom?
You've probably already read articles that predict that the Costa del Sol boom will be followed by a crash. Of course, there are arguments in favor of the fact that the real estate market here is inflated like a soap bubble and will burst in the near future. Indeed, the Costa del Sol is one of the most expensive resorts in Spain, since the demand for local villas and apartments consistently outstripped the supply, even despite the increased the volume of construction. In addition, prices were inflated to an unacceptable level due to speculative purchases of housing under construction in order to resell it before completion of construction. Such a situation cannot be called anything but critical.
But there are arguments in favor of a soft stabilization of the market. The growth in real estate prices on the Costa del Sol was about 17% in 2004 and is expected to reach 12% by the end of 2005. It is expected that in 2006 it will decrease to 9%. Foreign analysts sometimes forget that foreign buyers are not the only ones in the Costa del Sol. Low interest rates in Spain, an increase in the real income of local residents, demographic factors - all this has increased the number of local residents buying real estate. Add to this the Europeans and Russians who are eager to relax on the Costa del Sol - and you will get enough demand even with high prices and a large volume of construction.
The slowdown in the dynamics of price growth is determined by the formation of a new market in which investors are gradually changing. Instead of people speculating on real estate, there are buyers who purchase real estate for themselves, their children or parents.
Paul McMullen from Escapes2 makes optimistic forecasts: "It is expected that a new price increase will begin over the next six months, which will continue in the future. Perhaps its pace will not be so attractive for investors making short-term investments, but it is ideal for those who want to combine a vacation with solid investments."
Potential buyers should not worry that they will not have enough real estate. The municipal authorities of the Costa del Sol predict a doubling of the population in the next decade to 1.7 million people, and they are doing everything possible to ensure that the area remains viable. At the moment, the municipality is developing new plans for the construction of housing and infrastructure facilities.
What, where, how much
The Costa del Sol is a good place to buy a property, but you have to make sure that for your money you get a really high-quality and well-located house. Daren Wallbank, director of marketing and sales at Rushcliffe International, a real estate development company engaged in construction in popular resorts in Spain, explains: "Until recently, any purchase guaranteed you a stable income regardless of location, but now you have to make a choice a little more carefully. If you can successfully combine the location, the quality of construction, a good view and a wide range of available infrastructure, then a reasonable profit in the future is guaranteed to you."
From Malaga to Marbella, with stops in Torremolinos and Fuengirola, and further west, towards Gibraltar, through Puerto Banus and Estepona - that, in fact, is that coastal area, which is in question. Marbella is the most expensive city on the Costa del Sol, but at the same time there is a fantastic selection of all kinds of houses with all kinds of amenities and luxury attributes. For example, Engel & Völkers can offer you a luxury ten-bedroom mansion with sea views and a heated swimming pool for $4.5 million or a less spacious but refined Persian-style villa for $2.8 million. For buyers with an average budget, we can recommend a two-bedroom apartment in a golf club in Los Flamingos, west of Marbella, also with sea views, but already worth $470,000 (sold through Savills). If you prefer the tranquility of a Mediterranean village, then the same company is ready to offer you a one-bedroom apartment in the orange groves of Marbella - for $ 320,000.
Marbella can be called the Spanish Saint Tropez - a resort town that is loved by both fashionable secular "party-goers" and ordinary vacationers. The charm of Marbella lies in its convenience, in the sights, in the pretty old towns and in the length of the coastline – more than 35 kilometers. The stretch of coast from Marbella to Puerto Banus is considered the "Golden Mile" - expensive, exclusive, and worthy of attention if you want to make long-term investments in real estate that will always be in demand.
However, is only one "Golden Mile" enough for such an attractive coast as the Costa del Sol? Another part of the west coast has a similar name - from San Pedro to Estepona, and real estate here is only slightly cheaper than on the first "Golden Mile". Estepona is a well–established town, despite the rapid construction on the coast, preserving its Spanish identity. In Estepona, as well as in the neighboring Lar Sol, you can buy apartments with two or three bedrooms at a price of $350,000. The growing demand for real estate will be supported by the construction of approximately 55,000 sq.m. m of housing, which is provided for by the Estepona development plan in the next 15-20 years. In order to avoid too dense development, extensive areas are allocated for construction.
Similar development planning is now being implemented throughout the Costa del Sol. New facilities and construction restrictions are determined by both the regional government and local municipalities. The authorities highly value the income from tourism, but do not want to sacrifice the existing high quality of life, which attracts tourists. The municipality discusses construction plans with residents and interested companies that have the opportunity to influence the development of the region. It is also important that the pace of infrastructure development does not lag behind the pace of population growth.
Transport infrastructure
The influx of foreign tourists and property owners on the Costa del Sol is growing every year. In order for the airport in Malaga to cope with the increasing load, it began to be reconstructed, as a result of which passenger traffic will double. The first stage of reconstruction should be completed by June 2006, it involves the expansion of the existing terminal. The second terminal and a new runway should be completed in 2009.
Another stumbling block is often congested roads on the coast. The construction of tunnels and interchanges in such difficult areas should reduce congestion. In addition, the authorities are planning the construction of new railways that will connect the cities on the coast, as well as connect them with other regions of Spain.
The projected railway from Nerja on the east coast to Estepona in the west will connect the most popular holiday destinations, allowing vacationers and homeowners to avoid traveling by road. Despite the fact that the completion of the construction of this road is planned only in 2012, this is an argument in favor of long-term investments in real estate for the purpose of further renting it out.
Golf courses
The expected increase in the flow of tourists and the further development of infrastructure are one of the important arguments in favor of buying real estate on the Costa del Sol. Special attention should be paid to the golf industry, which is extremely developed in this corner of Spain. There are about 60 golf courses in Andalusia, and about 30 of them are located on the coast. Perhaps this is the only competitor in Europe to Algarve, a recognized leader among golf resorts.
Most often, golf properties are detached villages with developed infrastructure - clubs, entertainment, shops, restaurants, and a large number of other amenities. All these are necessary conditions for owners of golf real estate. Developers from Arenal 2000 feel the specifics of golf apartments very well. This company builds and sells real estate on the coast in Benalmadena - worth from $260,000, in Estepona - from $223,000,and in Manilva - from $255,000.
If you are planning to purchase a golf house of a higher level, Escapes2 can offer you a four-bedroom villa on the territory of an exclusive country complex in La Zagaleta, located near Estepona. The villa has a vast territory of more than 0.6 hectares, a garage for five cars and an understandable price of $4.7 million.
Inland
Costa del Sol in Spanish means "sunny beach" - this is by definition the coastal part of Andalusia. However, as the demand for real estate and the density of coastal development grew, some inland areas of the province also began to be attributed to the Costa del Sol. You need to drive only a few kilometers inland from the coast to find excellent, ready-to-live houses.
The choice of accommodation away from the coast can be very interesting if you want peace and privacy, and are also looking for a profitable investment. Grupo Jale is building the Vista Bahia complex near the village located on the slope of Casares, in the developing region of Manilva. Prices start from $225,000, and for this money you get Andalusian architecture, swimming pools, proximity to golf courses, international schools, as well as quality shops and restaurants of the resort coast.
On the western part of the Costa del Sol, you can find real estate for any, even the most demanding taste, but its cost is quite high. To save some money, it is worth expanding the search region in the eastern direction - from Malaga to Nerja. Located near the airport in Malaga, the cities of Rincon de la Victoria, Torrox and Nerja offer the same mild climate, the same coastline and at least some of the same services and amenities as the western part of the coast.
In Rincon de la Victoria, a development plan is being developed in such a way as to stop the rapid expansion of the city and at the same time allow the city to develop. The plan provides for the construction of a new highway and new infrastructure facilities. Those who believe in such plans can find a small one-bedroom apartment for $160,000 or a more spacious three-bedroom apartment for $280,000. Further east, in Torrox, a large three-bedroom villa with sea views within walking distance of the beach can be purchased for $485,000, while a three-bedroom apartment in a new building is sold for $200,000. These properties are being sold through Premier Property International.
Buyers on the Costa del Sol are changing. There are fewer and fewer foreign investors among them and more and more willing to use their purchase for their own recreation. In Spain, there is also a concept well–known in France - leaseback, that is, the sale of property with the condition of leasing it back. According to this scheme, the Terrazas Costa del Sol complex, located in Manilva, is being sold. Construction is expected to be completed in July 2007, but for now Savills International has a large selection of apartments with one, two, or three bedrooms priced from $210,000, $270,000 and $430,000, respectively, and the possibility of using the owner of their apartments for up to 12 weeks a year. At the same time, VAT withheld when buying real estate is reimbursed, and rental income is guaranteed.
The Costa del Sol remains one of the most desirable places for buyers from Europe and Russia. This coast attracts with a mild climate, a free atmosphere, a developed service sector and infrastructure, as well as a convenient and relatively short flight. And although everyone has a choice - to buy real estate at fairly high prices or to move away from the reliable and well-trodden road by the Spaniards and make a purchase in the emerging markets of the Mediterranean, the Costa del Sol does not give up its position.
