Earlier in the year we reported on the state of the Sotogrande real estate market and how it had evolved since our previous review in 2012. At the time things were looking up and we were cautiously optimistic, conscious that we were as yet still coming out of a recession in the local market. Now, after almost a full year of trading in 2013, we can be more robust in our confidence, having already realised something close to double the number of transactions compared to 2012, which in itself saw a doubling in relation to 2011.
Where 2012 marked the turning point from the lows of 2010 and 2011, this year has seen the consolidation of that upward process. We are pleased to say that there has been a significant increase in interest and indeed sales over the past year, not only at Holmes Sotogrande but in the region as a whole. Those real estate companies that are proactive, know how to use modern marketing tools, present their properties well and clearly, and are geared towards offering a professional and efficient service, have found that there are buyers out there.
“This is still a price-sensitive market,” says Holmes director Ben Bateman, “but if properties are attractive, well-located and priced right then there are definitely buyers for them.” He also notes that prospective buyers are very well informed these days, having usually spent a long time gathering information on the internet before approaching agents. “They are far more knowledgeable about the different areas and price levels, which is actually pretty helpful as it allows us to move forward more efficiently.”
An upward trend
Ben and his team are receiving a lot of visitors to the company’s website – 20,000 unique visitors so far this year! The so-called bounce rate of 30 per cent is low, meaning that 70 per cent of people who land on the page continue to look and read, spending an average of five minutes on the website. “What’s more, many come back time and again, slowly gathering information until they feel the time is right to start looking in earnest. It’s how we consume nowadays, and it makes for highly focused buyers.”
Each month the figures show a roughly even split between new visitors to the Holmes Sotogrande pages and people coming back to them, but just recently the number of people contacting the agency to find out more about specific properties or coming down to view them has risen strongly. “A lot of people can see that we’ve turned a corner in this market. It is still a price-driven market and fortunately most homeowners have realised that if they really want to sell their property they have to price it accordingly, but on the other hand there are few buyers left who come with unrealistic price expectations and the general consensus is that prices aren’t going to drop further.”
While not wanting to hear the word ‘boom’ mentioned, Ben thinks that at the current rate we could see the scene set for prices of highly desirable property beginning to rise slowly again by the end of next year beginning of 2015. “Especially in the strongest locations, where there is already a little bit of competition for certain properties. We’re nowhere near the stage yet where people are outbidding each other, but the days when you could make low offers and play the waiting game are over now. You may just find that someone else is happy to make an offer nearer the asking price, or even to accept that price, and if you miss such an opportunity there is no guarantee the same won’t happen with the next property you set your sights on.”
A perfect time to buy
“I know, if you ask an estate agent it’s always the perfect time to buy,” laughs Ben, “but this moment in time really does present an ideal combination of attractive pricing combined with the promise of an ascendant market about a year or so away. Had you bought a year or two ago you might even have found some better bargains, as those were more desperate times for certain people, but there was less of a sense that the market was moving upwards instead of down.”
In effect, the market is recovering and prices have bottomed out at levels not seen since around 2001-2002. Just as during the previous recovery we have seen the tourist sector rebound, followed by the real estate sector, and now also the businesses and services that tie in to these important sectors. “The difference with last time round is that Sotogrande now has a much better year-round infrastructure and provision of services, and both existing and new restaurants, bars and support services appear to be doing a decent trade.”
Ben also notes that while Sotogrande remains a highly international and therefore cosmopolitan place, the important Spanish and British markets have shown a strong recovery this year. “It’s another positive sign, which comes amid an overall improvement in macroeconomic indicators, such as the improved stability of the euro, the news that Spain has come out of recession and the rise in job creation.” His advice to homeowners is that those who really wish to sell their properties should price them attractively and the property will sell within a year, sometimes as soon as three months. “Those who have no need to drop their prices I would ask to take their properties off the market and wait for prices to begin their rise back up to the level these people would be happier with.”
It helps to keep the market less cluttered and more transparent in terms of the realistic pricing levels at which supply and demand meet in the present moment. “For now the main thing is that people are buying, selling, renovating and even building private villas, able to look to the future with a sense of confidence that wasn’t there two or three years ago. It would make no sense to do so now, but if the process continues like this I would expect savvy developers – especially those with land – to begin work on new developments within two to three years. Why? Because by the time those properties are ready, around 2017, we’ll be starting to feel a shortage of supply.”
Asked what shape this new development would take he says smaller-scaled than before, modern in styling, technology and amenities, and focused on quality rather than quantity. “There may be a little less external ostentation than before, I think, but also a strong focus on quality, modern features and also energy efficiency.” It seems, therefore, that for those willing to work hard, provide a quality service and ask sensible market prices the Sotogrande market is looking a lot rosier again these days.
By Jackie Cruz - Manifesto ·