Why people invest in Marbella property
People from across Europe and indeed beyond have been buying homes in Marbella since the 1950s. Why? Well, if we’d headed the article with the title ‘Reasons why people buy Marbella property’, the main answers would be the climate, the beautiful natural setting, the seductive Spanish culture and cuisine, the luxury amenities, the glamorous appeal of Marbella, and above all, the great quality of life enjoyed here.
Investing in real estate
These largely sensory and emotive reasons why people buy in Marbella also feed into the reasons why this is a consistently good market to invest in. We all know that a proper investment portfolio should be spread between high-risk, high-yield and lower risk, lower yield, and that this is achieved through a variety of asset types, but real estate is a solid, tangible one with a real, i.e. practical, use and the land homes stand on are a finite resource that grows scarcer all the time.
Real estate investment is therefore a tried and tested form of investment with a built-in store of value, and while it too is subject to the ups and down of the market, it always floats back up in the end and unlike some other asset classes is not made up of company shares, bonds or some other type of conceptual wealth. At the end of the day, you are left with a home, and when it is a good one and it is located in a rather unique beauty spot like Marbella, its long-term value is always pretty robust.
Property is therefore a store of value, and in a place such as Marbella its long-term price trajectory has always been strongly upwards, regardless of the temporary falls associated within economic recessions. After 2008, over-supply coupled with the global financial crisis led to a sharp decline in sales and prices, but by 2014 the property sector on the Costa del Sol was in full recovery, and by 2019 prices have more than recovered – as has the vitality of the sector and the appeal of Marbella.
The growth in property values in Marbella has therefore consistently outperformed stocks and bonds, a fact that is accompanied by a very strong long-term rentals market and an arguably even more lucrative holiday let segment. Both of these options provide homeowners with the ability to rent out homes they don’t live in throughout the year, and in this way earn a return on their investment.
What’s more, the local town halls in Marbella, Estepona, Ojén, Benahavis and Mijas are business-friendly and keen to continue to improve the region, while a new coalition of parties in the Andalusian regional government is creating the conditions that will make this part of Spain as attractive as possible to national and foreign investors. These include reduced taxes and bureaucracy, increased flexibility for those wanting to do business here and very low inheritance taxes.
Michael Liggan, CEO of Altavista Property says: “With such strong lifestyle underpinnings shoring up a sound investment proposition, the Costa del Sol provides the ultimate situation where following your heart also makes perfect financial sense.”
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