Here Spanish property expert, author and Managing Director of Marbella based agency Cloud Nine Spain Sean Woolley chats with local real estate marketing consultant Alfredo Bloy-Dawson about the “Year End Market Perspectives” report published by Forbes Global Properties from a local Marbella luxury real estate perspective.
The 31-page International #luxury property market report is packed with stats and trends about the world’s super-rich, (albeit with a slight slant toward the US market).
The following appears in this video interview here: https://youtu.be/zNN6UpImboQ
Alfredo Bloy-Dawson (ABD) – Today, I’ve asked to speak to you to look at a report published by Forbes Global Properties. And this report is about, I think it’s 31 pages in length, and it talks about the trends of what they’ve learned from 2021 in terms of the luxury property segment worldwide. The first thing I want to ask you is what was your takeaway from the report?
Sean Woolley (SW) – I think that there was nothing surprising in there, in terms of what we’d seen, but a few points that I was interested to almost have confirmation of was the fact that there’s been a flight of money and investment to bricks and mortar during the pandemic year or years, if you like. People have wanted a safe haven for their money, but they’ve also wanted to combine that investment angle with something that can improve their lifestyle. Another thing that was interesting was the profile of the buyers in terms of age, demographic, that sort of thing, and how there are more people of a younger age who are now buying the expensive properties. So that was quite interesting because I have certain kind of thoughts and views on that. And just, I guess, about how buyer priorities have changed in terms of what they want. Now people would rather, or it seems to be, that most people would rather have space and privacy and land and maybe homeworking amenities in their property than they would by having a smaller property, maybe on the beach or near amenities. So that has changed as well.
ABD – So on the point about the trend towards younger buyers, my interpretation of this report, and other ones that I’ve read, isn’t that it’s changing, it’s that the previous ones are still there, but it’s adding. So that there is a younger demographic coming in. And this report said that 75% of luxury buyers are now under the age of 56.
ABD – That’s quite telling because at least here in the Costa del Sol your typical wealthy golf retiree that might go to La Zagaleta or El Madroñal, or somewhere else like that, was definitely over that age. Is that something, in terms of the age, that you’ve experienced?
SW – It’s interesting because I think we have to separate this into two distinct areas. One is primary residence that you’re buying as your own home. And the other one is a secondary home, a secondary residence. And I still think that people who can afford to buy a, say a multi-million Euro second home, are more likely to be of a more vintage age.
So I think the figure that you’re throwing around there idly is more to do with primary residences. The interesting thing is that, and one thing from that report, of 2,755 billionaires, only 106 of those are aged between 25 and 40. So it accounts for only 3.8% of the billionaire buying market, so to speak.
The rest are, well, unless there are some other 25, the rest are over 40. So they’re old codgers like me. And a lot of the report was saying that maybe the market, the more important market, particularly for second homes, is that 41 to 56 years of age group. Which is the one that we tend to target as well.
ABD – One of the points that I found also interesting in this is that it talks about the buyers having less patience in waiting for their property. So the demand for turnkey, move-in ready properties is much higher proportionately, and there’s less patience from the side of the buyers that are not willing to put another year on hold of their life and their lifestyle. Incorporated with the fact that, again, very written about everywhere, so I’m not revealing anything new and nor is the report in terms of this idea that remote working policies is blurring the lines of primary and secondary residence.
One of the cool expressions that I heard in this report that I hadn’t heard before is the term “Zoom rooms.” And that is that houses having this, as a must, having a space for an office as one of the top prerequisites, something that perhaps wasn’t the case two years ago.
SW – It’s really interesting, isn’t it? When I looked at the reports’ top six kind of wishlist of features for a property now, number one is space, number two is workspace, number three is privacy and security, number four is ready now, number five pools and fitness, and number six garden and terraces.
The reason I moved last year was because I was trying to run two businesses from my kitchen table in the apartment. And it got to a point where it was like, hang on a minute, this is crazy. Because I wasn’t using my office and I was working from home. And so one of the reasons for moving to a Villa, for me, was to create my own office space.
And now I have work colleagues come and meet me here. I do a lot of Zoom work like this. I have clients come sometimes, drop in, and say hello. We do a lot of our work here. So that’s been a huge factor. And I think also what you mentioned about people not wanting to wait.
You’re absolutely right. We all know how long 18 months, 2 years feels now because we’ve lived through that amount of time with this pandemic over our heads. And I think people just want to get on with their lives, whether it’s to fly and see relatives, or just to own a holiday home and enjoy their life. So I think the only thing we’re noticing is that there’s a lack of stock, particularly in the high end of the market, particular in Marbella.
There’s a lack of good stock that’s available now. So you either have to go off-plan or do it yourself, or you have to renovate, which again takes a little bit of time. But that’s why we’re seeing older properties being bought that people can renovate within maybe six months. ‘Cause it’s still a heck of a lot shorter time than waiting two years for something that’s not even out of the ground yet.
So there’s all these little stresses on the market. People don’t want to wait, but they’re having to, to get the stock in the right area that A, they can afford, and B, that they want. And I think also, like you mentioned, the workspaces is very important.
I was speaking to a few agents the other day who were saying workspace and home gym, they’re the two big things at the moment. The home cinema kind of thing has gone down the list, used to be all there is, isn’t it? “I’ve got to have a home cinema with Dolby surround sound” Or whatever it was at the time. And those days are gone. I think because audio visual stuff now, the equipment is so high-tech.
You can effectively have your home cinema in your lounge if you surround speakers and stuff like that, and you’re off. So yeah, it’s interesting how the home gym and the office has taken over in terms of the things on top of the wishlist.
ABD – So the overriding feedback that I got from the report was that the rich have got richer. That’s something that we’ve been saying all along. It’s supported by fact and figures throughout. So I don’t think there’s any secret, but I find it interesting the statistic that over the past year there’s been 1.2 million more High Net Worth Individuals in the world.
SW – Yeah, I saw that. And that High Net Worth Individual is someone, according to this report, someone who has investible assets of a million dollars or more, not counting their primary residence. So pretty liquid cash or investments that they can invest.
I think there’s been a flight of money. As I said at the start, there’s been a flight of money to bricks and mortar, particularly as we come into maybe an inflationary cycle in the economy. I think that what people are after is that safe investment.
Okay, then maybe a little dip here and there, along in any market. But ultimately, you would expect if you hold onto that property for five or 10 years, that at least you get your money back.
But also the fact that same investment can also offer people that wonderful lifestyle now. And I think there’s this blur between primary and secondary home ownership. A lot of people who have come over here looking at buying second homes, they’re actually spending more and more time here and they’re moving the whole family over here.
So it might be that, again, not meaning to be sexist, but the husband might be commuting from Sweden or the UK, but the family and the wife are very happily ensconced in a luxury villa in Marbella. The kids go to local private schools.
Everyone’s happy, they’re playing around in the sunshine. And so it’s a lifestyle that actually suits people now, particularly if the breadwinner can work from home.
And it’s interesting that report also mentioned that the old adage of ‘location, location, location’ is now been changed to ‘location, location, lifestyle’. That it’s not all about location now, there are other things that people are considering.
I mean, I ended up in a location that hasn’t been particularly popular for the last decade because it’s a little bit far away, but now it’s hugely popular. Where I am there’s 14 villas being built at the moment because people want the privacy, the security, the space, all those things which I want. So, it’s interesting how it creates different markets in different areas for different people really.
ABD – So in many ways you are an example of what they’re talking about in this report.
SW – Yeah, I just wish I had all the money.
ABD – There seems to be more facts and more trends and more things in common globally on the wealthy side of things with the market here than what you might see on a report about Spain’s prices or increases or stocks, or anything like that
SW – Yes, because who actually cares about Spain’s prices? If you’re buying a property in Marbella, you’re not really buying in Spain, you’re buying in a luxury market. And it’s very, very particular.
ABD – My point is that this report from Forbes Global Properties seems to resonate more here , with the market conditions here, than some of the national reports I’ve read in the last couple of weeks.
SW – Absolutely, but unfortunately, a lot of the overseas media will use the national reports to tackle an agenda that they may have. Whether it be, oh, properties are on the slide in Marbella or there’s going to be a boom. So, oh, don’t buy.
People will always make a new story out of a statistic. And like you say, those statistics really don’t bear relevance or too much relevance on the market that we have here on the Costa del Sol.
Get your copy of the Forbes Global Properties report here: https://www.forbesglobalproperties.com/annual-report/