The luxury real estate sector demands land to build more homes on the Costa del Sol

The luxury real estate sector demands land to build more homes on the Costa del Sol to alleviate the lack of supply, thus calling for the facilitation of its availability by public administrations or expedited processing of urban developments, as highlighted by several high-end market agents this Thursday.

This was emphasized at the event ‘Luxury Real Estate Investment on the Costa del Sol’, organized by Tecnitasa group, which featured several round tables where the present and future of the luxury residential market, artificial intelligence applications, and the challenges and opportunities in the region were analyzed, where aspects such as teleworking have led to an increase in demand, mainly from foreigners due to the loss of purchasing power in the national market.

During the event, the ‘Report on Evolution and Trends of Luxury Residential in the Costa del Sol’, prepared by Tenitasa, was presented, concluding that the western region continues to be a reference destination, with a growth of 3.17% in the prices of high-end properties - over 3 million euros. The average value of luxury properties in the province is 5.2 million, with Benahavís having the highest value at 26.6 million.

The day emphasized the “lack of supply” and the need for faster “bureaucratic processes” as the main challenges of the sector, where “foreign demand” is a “fundamental pillar,” according to Juan Alfonso Navas, the director of real estate business in Eastern Andalusia at CaixaBank. Thus, he advocated for “facilitating land” and that “developments should not take 10 or 15 years,” emphasizing that “the first step must be taken by the administration.”

Pedro Soria, advisor for Strategy and Business Development at Tecnitasa, advocated for “generating land for luxury or affordable housing that can address this lack of supply.” The expert positively valued that the housing access problem is in the “focus” of the political class, which in his words will be “beneficial for the sector looking forward.”

Beatriz Toribio, the general secretary of the Association of Developers and Builders of Spain (ACPE), opined that the main opportunity for the sector is to “create a real estate industry” given “the amount of housing supply needed” and the “lack of employment,” with the aim of “attracting investment, employment, and generating economic activity.”

The lawyer and economist, Jesús Ruiz Ballesteros, from the firm with the same name, highlighted as a challenge “changing the administration” and as an opportunity for the sector to improve the “productivity” of companies with technology. He also criticized the “excessive regulation” and the “tax burden” in the sale of homes.

Francisco José Carrasco, director of the HolaBank segment in Andalusia at CaixaBank, noted that there is a “brutal demand from foreigners,” a trend that has been accentuated by the pandemic and has facilitated “teleworking,” highlighting the “imbalance” it has created in the Costa del Sol because there is a “lack of product.” He also referred to a change in the buyer's profile, highlighting “the Nordics, the British, and many Central Europeans,” mainly from the Netherlands and also from Eastern Europe.

Change in the profile of buyers

The round table analyzed the change in the profile of buyers and the preferences of Generation Z, which demands “personalization of homes,” with a client who requires “higher quality and cutting-edge designs,” along with “technological innovation,” highlighted Selma Dalebrook, the delegate in Málaga for Tecnitasa. At this point, she emphasized the rise of branded residences to “establish an emotional link” between the brand and the home and how Marbella's leisure offerings have adapted to these clients’ preferences.

The decentralization of luxury locations is another aspect addressed in the report, generated by “the very scarce supply” and the demand, elaborated José Antonio Muro, the general director of Tecnitasa, who noted that the new buyers demand “exclusivity, design, quality in materials, privacy, and personalization.” He also highlighted the “concern for sustainability.”

Meanwhile, Dalebrook emphasized that “more and more municipalities host luxury developments” since in Marbella there is “little land to build” and “much foreign demand.” Thus, she mentioned that new locations are found in surrounding municipalities like Estepona, Benahavís, Casares, Istán, or Ojén, where “prices are not so prohibitive” and allow for “more privacy and contact with nature,” while enjoying the “services” of the city of Marbella.