Sean Woolley – chief executive of Cloud Nine Spain – and Spanish property marketing consultant Alfredo Bloy-Dawson have been looking at the figures and discussing the state of the market.
They are cautiously optimistic for Q4 2025, saying that the market remains strong, despite legislation changes and the post COVID glut of demand slowing.
Prices are still rising, but the market is cooling and some adjustments are being made, with buyers pushing for more value, and properties not selling for the asking price.
Alfredo has been studying the figures from property valuation company Tinsa, which showed that for Q2 this year, valuation prices were 17.2% up against Q2 of last year in Marbella, 29% higher than the provincial capital, Malaga City, and 36% above the average of the entire province. “The statistic here says that prices in Marbella are still flying up.”
However, he notes that there are some discrepancies across the board. The property portal Idealista’s figures show asking prices being up 15% across Spain. While the notary figures, which are what buyers actually paid, show transactions in Spain up by 6% and prices up by 8%.
He concludes, “What the figures tell me is that there seems to be a disconnect between what people are asking for and what they’re actually getting. Which is normally an indication of something moving from being a seller’s market to a buyer’s market.”
Sean agrees with this assessment and is seeing a similar situation on the ground. He explains, “I think we’ve satisfied a lot of the post-COVID glut of demand. There’s still a huge amount of demand there, but it feels like it’s normalising.
Reviewing price adjustments on our main shared property portfolio we can see prices coming down a little bit. This is great to see, because we don’t want this market getting to the stage where no one can afford to be here. To keep the market in check, there does need to be a little adjustment.
These reductions are not a market crash, or symptomatic of a market crash. They’re just price corrections from properties that were previously overvalued. In the current market, buyers want value and aren’t afraid to push back on price.
I think we’re going to see a little bit of friction between buyers and sellers in terms of getting deals done at prices that are right for both of them. That’s just got to sort itself out.
I’ve seen so many periods like this in the market where there’s a period of self-adjustment, a period of price corrections, and it takes a few months to sort itself out. I think the canny sellers who price correctly are going to do well.
The general level of demand has probably dropped off a little bit, but it’s still a very strong market.”
The buyer profile has been evolving since COVID, with a wider spread of nationalities buying and many more people making the decision to move permanently.
Sean explains, “We’ve had a huge amount of wealth invested here, and we’ve large numbers of people emigrating from their home countries to Southern Spain. It’s made for a really dynamic environment, with an influx of permanent residents from all over the world.
The market, in terms of nationalities buying, has definitely spread out a lot. We had 34 different nationalities enquiring for properties last month at Cloud Nine. I was amazed by the breadth of it. It wasn’t just Europe, it wasn’t just Asia, it wasn’t just South America. It was all over the place, which is a great thing for the market.”
Alfredo has studied the figures and agrees that the nationality breakdown has changed in recent years, from three big players at the top, to seeing a much more equal spread.
“When you look at the top 15-20 nationalities buying in Spain, things have really changed. It used to be grouped at the top. The top three or so would be 15%, 10%, 9%, and then there were all these little bits, 3%, 3%, 3%. If you look down the list now, you’ll see it going down by increments of less than a half a percent for all the different nationalities. For example, the Brits are 8%-5% of the buyers in Spain, but the Poles are only about 2% behind them, and they’re not even in the conversation as far as the market is concerned.”
The nationality this year in Spain that has really bucked the trend compared to the rest is the Dutch – on a national, regional and provincial level. They’re not just back on. They’re third position after the Brits and the Germans, something we’ve never seen before.”
There’s been a lot of announcements lately regarding rental regulations.
There was a ruling from the government in September, to say that the short-term rental licence is tied to the property and not the person. This is excellent news for property owners with licences already in place. However, there’s still some confusion, as they are saying there’s still need for the community to give consent if you are purchasing the property and want to rent it out. This doesn’t seem correct and the team expect it to be challenged in court and that in 3-6 months’ time we’ll have more clarity.
Malaga City revealed that they’re stopping issuing any new short-term rental licences for a period of three years. Sean feels this will be a chance to remove illegal properties, clean up the market and ensure that Malaga doesn’t experience the same problem that Barcelona did, with a too high percentage of properties being tied up for rentals.
Another ruling said that non-EU residents can now deduct the short-term rental expenses from their tax declaration. This is great news as it makes quite a big difference for anyone outside of the EU and brings it into line with what those in the EU could do.
Sean feels this may set a precedent and mean that the proposed 100% property tax for non-EU speculative investors will not be able to be put into place.
Conclusion
The market is strong, and mortgage rates are good, so they expect a strong end to the year. However, they do expect prices to adjust downwards to improve value for buyers and demand to be slightly down to temper the market, which they both agree is a good thing for buyers.
