Beware of greed, a market’s biggest enemy
It is fair to say that the real estate market in Marbella is in very decent health, showing a consistent increase in demand and accompanying sales that started in 2013. Construction activity has recommenced, with a growing number of attractive new developments being launched in top locations across the coast. Their modern architectural style and high-tech comforts are symbolic of a new Marbella that has arisen out of the ashes of the global recession and the excesses of the boom that preceded it.
Indeed, a new wind seems to be blowing through the region; the new PGOU (Plan General Ordenación Urbana) has created clear planning directives and guidelines for future development, local government has become more transparent and there seems to be a heartfelt common cause to avoid revisiting the mistakes of the past. So far, it all sounds good – but there is a cloud on the horizon.
The right price = value
The cloud, as is all too often the case, is the product of that old fiend greed. The revival in the region’s property market was originally driven by home prices that fell to newly attractive levels, strong enough to revive interest and entice a whole new generation of property buyers to the Marbella. Since then the market has strengthened to the point where it is not just price that motivates buyers, yet we cannot assume that buyers are no longer interested in price.
Naturally value continues to play a vital role, and value is defined by the right price-quality ratio, so while it is quite normal that home prices have bottomed out and are already beginning to rise again in the most desired areas of Marbella, we must guard against allowing them to rise too quickly. Prices that respond to demand and competition are not a problem, but it is the reaction of some homeowners and even agents to push prices up that can harm the revival of the region’s property market by prematurely inflating values upwards and frightening buyers off.
Some homeowners in Marbella are already calling off transactions when they realise that buyers haven’t tried to haggle the asking price down, and this sort of practice damages the market and its reputation. The solution lies in both informing property owners and offering realistic, authoritative valuations that correctly incorporate the latest price trends. Naturally it is a homeowner’s right to hold out for a higher price, but in that case we always advise them to take the property off the market and certainly not to change their minds in mid-process. We all – agents, homeowners and the buying public – have a responsibility to act in an honourable manner that does respect the various parties involved and does not do damage to the market and its reputation.