Q2 2023 Report: Sales patterns in Sotogrande Property Market
Q2 2023 Real Estate Market Report, my thoughts on sales patterns in Sotogrande, by Charles Gubbins.
Sadly, we do not have specific sales statistics for Sotogrande. Indeed, obtaining any data is difficult at best and contradictory at worst. Published data information can be obtained from Spanish Land registrars’ association, Spanish Association of Notaries, the National Institute of Statistics (INE), but they all use different timelines and sources so can’t be properly compared. Trends however are apparent.
Nevertheless, Mark Stücklin from SpanishPropertyInsight has mastered the art of deciphering the statistics, and produces great articles published regularly on his website. He recently wrote an article called “Foreign demand declines in second quarter, but only compared to last year’s boom” . I encourage you to read his article. It is insightful as are all his updates on real estate sales figures.
Below I try to assimilate his analysis of Q2 for the country with my qualitative understanding of sales in Sotogrande obtained from my own experience, and in discussions with real estate agents in the area….
- Mark says: “Foreign demand for property in Spain declined by 5% in Q2, according to the latest data from the Land Registrar’s Association. Even so, it was one of the best quarters on record.”
✓ True for Sotogrande. We have had a very good quarter with sales at a par with the previous year same period. A 5% decline may be a national average but not felt in our sales. Either the market is the same and maybe stronger, or maybe my market share has increased!
Source: Foreign demand declines in second quarter 2023, but only compared to last year’s boom – Author Mark Stucklin
2. Mark says: “The British were once again the biggest group of foreign buyers of Spanish homes in the second quarter with 1,998 purchases, followed by the Germans and the French”.
✓ True for Sotogrande. Although we may have seen a decline in the British market, they continue to be the nationality with most purchases. We of course have Gibraltar on our doorstep, with Sotogrande being the preferred place to have a Spanish property. We have seen an increase in German applicants although not seen a noticeable increase in French.
3. Mark says: Clearly the war in Ukraine is increasing demand for property in Spain from Russia, Ukraine, and Poland.
✓ True for Sotogrande. Although the Russian market does not seem to prefer Sotogrande (possibly too rural and quiet for them), the eastern European market generally does. Anecdotally bank managers have told me that Poles are the nationality most requesting mortgages. Also anecdotally, I have received calls from family offices looking for property for wealthy families. Rationale being, good investment, good holiday home and a safe haven, should things go berserk with the war.
4. Mark says: Where did foreigners buy homes in Spain in Q2 2023, and how much did foreign demand change in each region on a year-on-year basis? The Valencian region was number one as usual, with a 36% share of this market, whilst foreign purchases declined the most in the Balearics (-28%) followed by the Canaries (-21%) and Andalusia (-20%). Foreign demand increased in Catalonia (+2%) and the Valencian region (+9%).
✗ Not true for Sotogrande. Although the Andalusian foreign market shows a decline 20%, here in Sotogrande only the domestic (Spanish) market in Sotogrande seems to have slowed down. Growing inflation, higher interest rates, and an inconclusive general election, seems to have caused the domestic market to think hard about buying a second home. The foreign market though as already mentioned is strong.
So why has Sotogrande continued to perform well?
Here are some qualitative reasons:
- Sotogrande is a low-density luxury urbanization. It is 60 years old where all plots have pre planning permission. So, you can find a new property, a resale property to refurbish, or build a new villa relatively simply. After the pandemic low density destination are increasingly popular.
- Sotogrande is now advertised by Sotogrande SA (owners of what’s still left to be sold) as a district of Marbella. Marbella as a keyword alongside Sotogrande archives visibility online. When applicants search for Marbella, Sotogrande comes up, as does La Zagaletta, Sierra Blanca Benhavis, Guadalmina etc… Sotogrande is no longer a secret!
- Marbella is getting very busy for many. Had you bought a property in your forties, thirty years ago, living in Marbella and its environs today may not be what you signed up for. With excellent road infrastructure living in Sotogrande means you are only 30 minuets away from your favourite restaurant. But you can still come home to a quiet and safe neighbourhood.
- The sales boom we have had over the last two years has left Marbella low on inventory. Marbella agents are now offering Sotogrande as an option to applicants.
The current pace of sales in Sotogrande will, I am sure, slow, and eventually fall.
One should always back cast to forecast. The real estate market is cyclical, and it is bound to turn. However, Sotogrande seems to be enjoying the benefit of the pandemic, the war in Ukraine and the lack of inventory in Marbella. Or maybe it’s just Noll Sotogrande increasing its market share!!!!
Charlie Gubbins
E-Mail: charles.gubbins@noll-sotogrande.com
Noll Sotogrande Real Estate
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