The Marbella property market in 2016.
Looking back, 2016 proved to be a tumultuous year for most, offering everything from unexpected political outcomes to economic news that was mostly positive, but also somewhat topsy turvy. After several years of consistent recovery that gradually became full-borne growth, 2016 brought us international and national tremors in the form of Brexit, the US elections and the Spanish political impasse that continued for most of the year. In spite of two general elections that produced no conclusive result and lead to months of unsuccessful coalition negotiations, the Spanish economy purred on quite nicely, en route to recording in the vicinity of 3% growth without the greater stability and public investment that an active government provides. By the latter part of the year it seemed as if no coalition could be formed and a third election would have to be called, but perhaps under pressure from the EU the process began to gather momentum, petty party interests were finally made subservient to the national interest and a new coalition between the centre-right PP and Ciudadanos passed. With a new government in place, the economic growth and job creation of the past two years will be further consolidated along with Spain’s current position as one of the most dynamic economies in Europe. This is in part due to the buoyancy of the important tourist industry – which is booming in Marbella – and the recovery of the also important property and construction sectors. Investment and consumer spending are also up, so most indicators in the country are pointing in the right direction as we enter 2017. International factors On a practical level the US elections will be greatly overshadowed in importance by the UK’s surprising decision to leave the European Union. This will no doubt have an impact on the Spanish economy, though with a strong focus on both Europe and its traditional Spanish-speaking markets in Central and South America, Spain already enjoys a good deal of diversification and is not greatly dependent upon trade with the UK. This is of course not the case in coastal areas such as the Costa del Sol, where the British have traditionally been the biggest market. Their once-dominant position, however, has dropped in recent years as the importance of Scandinavia, the Benelux, France, Eastern Europe and the Middle East increased and the source of tourists and homebuyers in places such as Marbella began to widen. One cannot deny that the bumpy ride of the Brexit process will impact Marbella, but it will do so most strongly in the lower part of the market, while the even more cosmopolitan higher end will be less affected. This is also because its investors and buyers are more experienced abroad and less influenced by factors such as Brexit, which in itself may still produce a run on properties in Spain and other EU countries as British buyers seek to maintain a foothold within the region. 2016 was an eventful but on balance reasonably successful year in these parts. Growth rates levelled off a little in places but continued to climb, with property values rising steadily and especially new-built Marbella apartments, penthouses and villas highly popular. For the coming year we expect much of the same, backed by a more stable government situation and strongly resurgent Spanish economy. With low interest rates, possible tax cuts and a financial sector showing good health we have every reason to be optimistic about 2017.
