As long as the sun continues to shine, the Costa del Sol in the area of Southern Spain, will always have the ability to cast a spell on Northern Europeans who are becoming more depressed with the long harsh winters and unpredictable summers.
The area between Sotogrande and Malaga has always been a holiday hotspot, with the resorts established in the 60s and 70s, such as Fuengirola and Torremolinos, home to tons of high-rise 3 and 4-star hotels, but the area further west, consisting of resorts and towns such as Estepona, Marbella, Benahavis and Mijas, offer a very different feel, with some of Europe’s very best hotels, together with some of the finest retail, sporting and leisure amenities available in the Mediterranean.
The area, which provides an average of 320 days of sunshine each year, has become a magnet for second homeowners over the past 20 years, particularly since the advent of low-cost air travel with the likes of Ryanair and EasyJet, which has developed great-value and plentiful commuter routes from practically every European city. Most of these property investors have taken the plunge completely by moving to the Costa del Sol permanently, drawn by the high-quality international schools, the outdoor lifestyle and improved accessibility and connectivity.
The 2020 lockdown has actually fuelled the already existing desire of thousands more potential emigrés and visitors in Spain. Depressed and dispirited, a majority of the Northern European population is desperate for at least a holiday in the sun, maybe even a longer stay. With the advent of flexible working practices and home-working, most people are seriously looking at basing themselves somewhere sunnier and with a better lifestyle on a full-time basis. After all, why work from home in Mannheim or Middlesbrough, when you can do so from the comfort of your own home in the welcoming and warm Marbella?
2021 could pose a perfect scenario for property investors in the Costa del Sol. New development has been put on hold for the past 12 months, meaning the market in the most affluent and strongest coastal areas has not experienced an over-supply of new stock. Property owners have refused to panic throughout the pandemic, meaning that, unlike the global financial recession of 2008, there has been no significant downward drag on prices. That being said, some much-needed price corrections have taken place which has brought the market back into more sensible pricing parameters.
In relation to demand, 2020 saw consistent levels of interest from prospective buyers, particularly at the higher end of the market, however, the severe travel restrictions have resulted in a huge amount of pent-up buyer interest that may be satisfied in 2021. With the predicted surge in holiday bookings in 2021 and beyond, together with the shortage of well-furnished, good quality homes available for long-term rental, there are genuine opportunities for real estate investors on the Costa del Sol.
The key, as always, is to buy a property in the right location – ideally nearby amenities and to ensure that community fees do not eat into your profit margins a lot. Generally, the rule of thumb is that one week’s high season holiday rental equals a month’s rent on a long-term let. An experienced real estate professional will be able to guide investors towards the best opportunities available and provide cost and income estimates to assist with the budgeting forecasts.