Market · Q3 2023
Price trends in Marbella and Benahavís: what the Q3 2023 data showed
Prices kept rising at double-digit rates. The question I asked then was whether the market could sustain it.
SHORT ANSWER
In the third quarter of 2023, property prices in Marbella and Benahavís were still rising at close to 13% a year, in asking, closing and valuation prices alike. The gap between asking and closing prices stayed wide (around 20% in Marbella, 17% in Benahavís) and new builds sold at a growing premium over resale homes. In my view, double-digit growth could not last much longer.
IN THIS ARTICLE
In December 2023 the official data for the third quarter of 2023 was released (Land Registrars and Notaries). I combined it with the change in asking prices on Idealista to draw four conclusions. These are 2023 figures, published in January 2024, not current data.
Were prices still rising at double digits in 2023?
Yes. Prices kept climbing at a steady, double-digit pace, close to 13% a year, and the growth showed up in the three prices being recorded: asking, closing and valuation prices. They had been on a consistent upward path since 2014, with a sharper acceleration from 2022 in Marbella and a continuous, sustained climb in Benahavís.
Official year-end data for 2023 was not due until March 2024, but the asking prices published on Idealista pointed to the same rate of growth as in previous months. Even so, the market had clearly slowed down in the last quarter of 2023, although the data did not yet show it.
How wide was the gap between asking and closing prices?
| Gap between asking and closing price | 2022 peak | Q3 2023 |
|---|---|---|
| Marbella | Close to 20% (historic high) | Still around 20% |
| Benahavís | Close to 24% | 17% |
Q3 2023 data from the Land Registrars and Notaries, combined with asking prices from Idealista. Own analysis.
It was still very significant. In Marbella the gap reached historic highs in 2022, close to 20%, and it stayed there, which means the average property was still listed about that much above what it eventually sold for. In Benahavís the pattern was similar: a peak near 24% in 2022 and a more moderate, but still notable, 17% in 2023. We look at what this means for sellers in overpricing your home.
Were buyers paying more for new builds than for resale homes?
| Marbella: new build vs resale | Start of 2022 | Q3 2023 |
|---|---|---|
| Difference in closing price per m² | €500 | €2,500 |
| Approximate premium of new build | 15% | 40% |
Closing prices. Source: Land Registrars and Notaries, Q3 2023. Own analysis.
Yes, and the premium was growing. Prices of both new and resale homes rose in Marbella and Benahavís, but the trends differed. In Marbella, new-build prices surged from mid-2022, while resale closing prices were steadier. In Benahavís, buyers of new builds were paying around 50% more per square metre than those buying resale. The reason is the general preference of buyers for new product despite the premium, together with the limited number of new developments in Benahavís.
Could this trend be sustained?
Personally, I believed the market could not support continuous double-digit growth over time. The US market, which usually runs about a year ahead of ours, went through a deep correction in 2023: prices fell 11% on average (17% in some places) and closed sales of resale homes dropped 40%. The main cause was affordability: high mortgage rates and rising prices pushed many buyers out of the market, closings fell and prices followed.
Could the same happen in Marbella and Benahavís? I was inclined to think not. Luxury markets like ours are less sensitive to mortgage rates and inventory remained low. The US luxury market was in fact more normalised, with a similar number of homes sold and prices up 3%. Our aim should be a more normal market, in both homes sold and price increases, because otherwise we risk continuing to put off potential buyers.
The current market is normalised, but the ongoing increase in prices may not be sustainable for much longer, as it risks destabilising the market.
Alfonso Lacruz, January 2024
For a more recent view of new-build pricing, read new-build prices on the Costa del Sol.
Frequently asked questions
How fast were prices rising in Marbella and Benahavís in 2023?
At close to 13% a year in the third quarter of 2023, in asking, closing and valuation prices, and consistently since 2014.
What was the gap between asking and closing prices?
In Marbella it reached a historic high close to 20% in 2022 and stayed around that level. In Benahavís it peaked near 24% in 2022 and stood at 17% in 2023.
How much more did new builds cost than resale homes?
In Marbella the difference rose from about €500/m² (15%) at the start of 2022 to €2,500/m² (around 40%). In Benahavís, new-build buyers paid about 50% more per square metre.
Did you expect the market to keep rising at this pace?
No. In my view double-digit growth could not be sustained for long, although I did not expect a US-style correction in a luxury market with low inventory.
About the author
Alfonso Lacruz
Naval engineer and market analyst. Over 25 years advising owners in Marbella and Benahavís. Publishes a monthly market analysis with Land Registry data.
The figures are indicative and every property is different: for a specific number, ask for a valuation of your home.
Sources: Land Registrars and Notaries (Q3 2023); Idealista (asking prices). Own analysis. Last updated: 22 January 2024.
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