Brexit’s silver lining for Marbella
The UK’s vote to leave the EU has greatly increased uncertainty in Spain’s property market, with worries of the impact a weaker Pound may have on the recovering sector to the forefront.
There is no denying that British buyers have been important in putting fluidity back into the market—in Andalucía they accounted for over a third of property sales to foreigners in 2015—and indeed growth in the budget-to-medium end of the market may well slow after a brisk start to the year.
However, there is a school of thought amongst property professionals that Brexit might actually boost the high-end sector in upmarket resorts such as Marbella. The reason is simple—in the rarefied world of multi-million Euro real estate the market is global and Marbella is well placed to take advantage of any capital flight from London as investors look elsewhere to shelter their assets.
Indeed, even before the referendum vote there were signs that London’s high-end sector had overheated and was due a correction—now that could happen even sooner than thought as uncertainty over exactly what happens next in Britain gathers. It could take years before confidence returns to the real estate investment market in London and in the meantime hotspots such as Marbella, Barcelona and Madrid could well find themselves the recipients of significant capital inflows as investors look for good value and a ‘safe haven’.
Added to that can be the attractiveness of Marbella to a wealthy international group of ‘non-doms’ who require easy visa-free access to EU nations.
Gonzalo Bernardos, an economics professor writing in El Mundo, pointed out that many millionaires from India, China, Africa, Russia and the Middle East had bought mansions in London not just as an investment, but to give them travel access to the EU. Now they may well be looking to Spain as an alluring alternative, particularly with its ‘Golden Visa’ for those buying properties worth more than €500,000. This gives Spanish residency and the right of access to Schengen agreement countries.
Marbella remains high on the list for ultra high net worth individuals seeking property. The exclusive lifestyle in the town provides all the leisure options they expect, Málaga’s airport offers easy access to international destinations and the luxury property market offers good value. Paradoxically the uncertainty caused in the money markets is also helping make property in Marbella cheaper on a global basis. Not only has the Pound been badly hit, but the Euro too has weakened against the US Dollar—the de facto international currency.
For international buyers who measure their wealth in dollars, real estate in Marbella has suddenly become even better value—thanks to Brexit and a softening Euro.