Essenza market in Marbella outlook
What does the immediate future hold for Marbella and its important real estate market? Fortunately a lot of positive trends, such as solid demand for luxury properties in good locations and a rise in transactions in areas such as Sierra Blanca, Camojan, Los Monteros, Guadalmina, Nueva Andalucía, La Zagaleta and the Golden Mile. Demand for the very best locations here is such that there is even a shortage of supply, which in turn has led to more and more people choosing to construct new modern villas on existing plots– a great way to combine 21st century luxury with the finest locations, and create investment value in the process.
Good news at the beginning of 2013 is that the Marbella property market is looking healthier than it has for some years. These are tentative signs of recovery as yet, and for the most part restricted to the midto top range of the market, but the encouraging feedback comes from a sector that has seen demand for luxury property strengthen, well-priced mid-range developments with available financing sell well enough for small-scale construction to start again, and even well-heeled buyers struggle to find the right kind of property in the most desired locations.
Another trend is the fact that today’s buyers are increasingly demanding modern homes, not just in terms of architectural styling and décor, but also modern construction standards, technical amenities and comforts.
“In our experience buyers are getting younger,” says Patrick van Dam, founding partner of Prestige Properties.
“A significant proportion have young families and come here to live permanently, so what they require of their home in Marbella is changing as well. As the majority are from northern parts of Europe, and in recent times especially from Scandinavia, the Benelux and Central Eastern Europe, they also have clear expectations in terms of style, comfort and homeliness.”
Such buyers want homes that comply with the construction norms in their own countries, use high quality modern materials, effective insulation, well-made doors and windows, provide warmth and comfort in the winter, offer high band width for fast internet access and use the latest domotics home automation systems insecurity, lighting and also home entertainment. What’s more, they have to be energy-efficient as well.
“Most of our clients are very well travelled, so they are used to a modern international style in boutique hotels and homes, and expect the same standard here,” says Patrick.
“Naturally there is scope to adapt the styling to the local setting, but modern contemporary architecture is very much what people are after now.”
This extends to the internal décor and distribution too, where clean, open plan layouts, full-length windows and tall ceilings create the fresh, spacious environments characterised by light and views that are so in vogue right now.
Satisfying a new demand
“The problem is that it is hard to find a good selection of existing properties that fit these requirements,” says Patrick, who has seen clients routinely reject even properties built in the past ten years.
“Although these properties are much improved in comparison to what was built before the mid-nineties, they very often fall short of buyers’ expectations because they were still primarily conceived as second homes.
As a result, a lot of peoplewho might actually prefer to buy an existing, ready-to-move-into property have started renovating and building their own villas.
”It is out of this specialised niche that Essenza Living was born, catering to the tastes and demands of a new generation of buyers with modern contemporary architecture, building standards and interiors.“
Through Essenza we help to satisfy this new demand and create 21st century villas designed around the wishes of our clients, ”says Patrick.
The desire to combine such homes with a great location leads many to effectively rebuild existing villas.
“This is a growing trend on the coast, and a bespoke service we specialise in, but converting an existing home into a modern one can have its limitations. You gain a prime location, and a rebuild costs around 80-90% of a complete new-build, but you are more limited when it comes to things such as ceiling height and redistributing the rooms.
”As a result, a lot of his clients opt for a completely new construction, be it on an established plot or a new one.“
In the current market buyers prefer consolidated locations to new areas, but already there is strong competition for the very best spots. Remember that empty plots in top locations are very rare, so if you want the latter in most cases you will have to buy the existing–often older– property on it as well. The value of such real estate is determined by the land and the intrinsic value of the structure, and to make a rebuild or renovation project feasible you need to find a property where the bulk of the value resides in the land.
”Essenza are specialists in sourcing such locations, both for end-users and investors.“
We source, do a feasibility study on the basis of a cost analysis of land and redevelopment, and if positive move on to the concept, architectural design, construction, interior styling and delivery of a stunning modern home. We also take care of the marketing of such a property on behalf of investors, for whom we compile cost, feasibility, marketability and projected sales cycle reports at the outset.
”The management of such a project also entails complying with all the planning and building regulations, and obtaining the required permits.“
The new PGOU planning directive offers clear and strict guidelines that can no longer be flouted as many used to do in the past. Add other new regulations, such as the new energy efficiency certification, and you see the value of having qualified professionals take care of this.”
Patrick also predicts a growing differential between such modern homes entirely in tune with contemporary tastes and technical requirements, and the larger body of older homes in Marbella.
“A great many older properties are being updated in this way, but those that aren’t will increasingly struggle to maintain their value in comparison. Well-built modern homes will pretty soon be the norm against which others are assessed, and are set to gain much more in value.”
They are therefore popular with investors in an international market where luxury real estate is replacing the financial markets as a solid form of investment.
“This is a trend that is adding fuel to Marbella’s slow but steady real estate recovery, and with the ‘baby boomers’ about to come of age in Northern Europe who knows how strong that recovery may yet prove to be in the coming years.”