My Thoughts on Sotogrande’s Real Estate Market: Navigating 2023-2024 Conditions

Posted on 3 Jan at 20:26

The Sotogrande Real estate market in 2023 may have outperformed 2022, which was, for many real estate companies a record year here in Sotogrande. According to Idealista the property portal, 2023 was ahead of 2022:

According to data from the General Council of Notaries, foreigners accounted for 21.4% of total home purchases in Spain between January and June, their highest share on record. Although the latest data is from the first half of the year, the figures reflect a very positive year. The British (9.6%) once again led the transactions, ahead of Germans (8.1%) and Moroccans (7.3%)

It seems all the potential negative factors that could have derailed any downturn in performance such as inflation, high interest rates, geo- political issue particularly from Eastern Europe and laterally Israel/Gaza have not affected the market in a negative fashion.

So, here are my thoughts on 2023:

Sotogrande seems to be “on the map” albeit increasingly as a “district of Marbella”. Recognition of Sotogrande as a luxury family resort continues. This has been fuelled primarily by the golf activities (The LIV tournament in Valderrama, and the DP World European Tour tournament at the Real Club Sotogrande), the continued international polo tournaments evidenced in the summer at the Ayala Polo Club, the continued excellence of the SIS (Sotogrande International School), but particularly I feel by the growing association of Sotogrande as a keyword with the key word Marbella on many websites and internet platforms. When potential applicants search for Marbella in search engines, Sotogrande appears as an option.
An increasingly active and buoyant local economy in Sotogrande, with ever an increasing number of shops, restaurants, and other services has begun to overcome some of the past objections to the resort. Namely that it is too quiet!
Due to the finite nature of Sotogrande it is an ever-increasing good investment. The supply and demand equation is simple. As offer decreases, and more applicants want to buy, prices have stabilized and indeed increased, and increased significantly in certain parts of the urbanization.
Although new builds are materializing the supply has been slow, and delivery of many a year or more away. Many new properties are flipped before completion of works demonstrating investor confidence in the continued growth of the market.
Prices are increasing due to total the lack of supply of good quality resale villas and apartments. Also, the rising costs of construction materials has led to higher m2/€ price points for new builds making resales an attractive alternative albeit with the need to refurbish and modernize older property.
There has been an influx of “out of town” agents looking for inventory as areas closer to Marbella lack good stock. Sotogrande can offer solutions to seller agents. Listing agents in Sotogrande have benefited.

What about 2024?

Assuming global macro-economic conditions remain stable, and that geopolitical friction in eastern Europe and the middle east do not get out of hand then….

My feeling is that cash buyers and refurbishments opportunities in the prime Costa area of Sotogrande will continue.
Sotogrande generally will continue to thrive with similar levels of interest as we have had in the past two years.
Applicants are still keen on low density environments. The pandemic is not forgotten.
New build apartments and town houses will sell out at a healthy pace.
Property valued over ten million may find it difficult to sell out as we have noted many clients although capable of buying very large villas prefer property no bigger than 1000m2. Personal choice rather than affordability.
Generally, prices will stabilize at current levels as construction cost plateau.
Southern Spain will continue to be the location of choice for European and increasingly American applicants. Good weather, safe environment, stable economy.