The Forbes Global Properties Year-End Market Perspectives has recently been published. (See here for the full report). The document highlights some key and interesting trends in the global luxury property market, where property prices, buyer demographics, preferred amenities, and second homes are highlighted as the most important factors worth commenting on. In my opinion, Sotogrande seems to have experienced the same trend albeit at different rates.
The first two factors are not a surprise. Prices are going up, particularly in the highly sought-after Kings and Queen’s area. ….. and the average age of those buying luxury properties is lower, fact. I would attribute price increases to supply and demand, 101 economics, namely more people are chasing after a limited number of offerings. Sotogrande is finite, although some, such as the Rockefeller initiative may suggest otherwise, and whose development is of course not in Sotogrande, albeit is not far. The point on demographics, that buyers are now younger, we see in the local Sotogrande market day to day. The growing digital world is driven by a younger generation who are reaping the rewards of their hard and creative work. The report notes that the younger buyer has added to the total pool of buyers, as the older demographic continues to buy luxury property.
Of more interest to me are the list of priorities buyers have when seeking a luxury home. They fully resonate with what we at Noll Sotogrande have witnessed over the past two years. More space, dedicated work areas, privacy, and security, ready to move in properties, fitness space, and outdoor space as well as gardens.
“Being in lockdown completely changed the way people look at properties and buyers make their decisions ensuring they have space” they say in the report. No one wants to compromise.
The term “Zoom room” was born and is probably here to stay. As exemplified in the report we also have had several clients looking for dedicated workspace in their homes, and many have moved to working from home partially if not permanently since the beginning of the pandemic. Quality of connectivity is of course paramount, something we in the urbanisation enjoy. In Sotogrande fibre optic cabling has been installed in most streets.
Sotogrande has always been short on spectacular sea views. The newer part in “La Reserva de Sotogrande” does offer wonderful panoramic sea views, but the more traditional areas such as the Kings and Queens do not. Not such bad news as buyers prioritise open air and privacy than to die for views. Security is of course a high priority which Sotogrande delivers.
Building a property from scratch will take about 24 months, at least 18 months from granting of a licence. Many do not wish to wait this long. There is a preference for a property that is ready to move into. Additionally with and supply chain issues constantly in the news, refurbishing a property is less desirable for the private homeowner, although maybe good news for small investor looking to remodel a house and flip within a six-month timeframe.
People are drawn to Sotogrande because of its low density, lifestyle, weather, and infrastructure. Due to quarantining home exercising became quite a thing. A bit like working from home, we have got used to it. So, in turn, we have noted demand for private workout spaces (both in and outdoor), such as yoga studios and workout rooms. Similarly, gardens and terraces are exceptionally important to today’s buyers. Confinement after confinement have made us all reassess the importance of available outdoor space.
Also highlighted in the report is the point of second homes being abodes much like a primary residence. Due to confinements, considerably less travel and differing work practises, many have reviewed their real estate portfolio. Second homes seem to be being used much more, and many cases becoming permanent. We have seen many families stay for long periods of time in Sotogrande. Children are enrolled in the local international schools, and what was a holiday abode slowly becoming a full-time residence. The knock-on effect is requirements for bigger homes with more space. This trend, which was already beginning before the pandemic.
Charlie.
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