The Sentence of the Supreme Court of Spain annuling Marbella’s 2010 PGOU. The reasons.

I have to say that the news that appeared on November 7th regarding the annulling of the Marbella’s 2010 PGOU (General Plan-ning Permission) were a shock to me and to not only the people in the business of real estate but also to all inhabitants in Marbel-la. The 16.500 homes that the previous 2010 Plan had, in different ways, legalized are again out of plan.

Although it is not easy, I will try to summarize the reasons given by the Supreme Court of Spain at its sentence:

Legalization of the out of Plan properties

The Supreme Court ruled that the Architect and the Technicians that completed the PGOU do not have enough powers to decide about the out of Plan constructions and how to make them fully legal.

Unconsolidated Urban Land

It is again about the same concept as before. The Technicians can not change the concept of what is a Unconsolidated Ur-ban Land.

The Compensation system to legalize out of Plan properties

The compensation system established to alter the property law was rejected as can not depend on the provisions drawn by the planner. It is again going back to the same principle, the technicians that produced the Plan can not alter the status of illegally constructed properties.

Environmental Report

The Plan does not comply with European requirements on environmental evaluation as it does not evaluate alternatives to what the Plan actually proposes.

Report about the Economic Sustainability

A Report on the Economic Sustainability of the Plan has to be included in the Plan and was not prepared nor incorporated.

In summary, and leaving apart the two last technical reasons, what the Supreme Court sentenced is that the Planner is not em-powered to legalized what was illegally constructed. As a final comment, I would say that I have been a number of times in the last weeks at the Planning Office of the Townhall and they are working extremely hard to find a way out to the situation created although it is not going to be an easy one as there are many legal implications.

The competition on the market of the luxury properties

This month I am going to analyze the selling of luxury properties. It is difficult, not to say, impossible to apply the comments on this article to the generality of the luxury market since, there are some niches where the generalities can not be applied like special properties for any reason o really top locations like first line beach Marbella Club.

I am writing this article because I have been asked many times lately to sell spectacular villas and I have always commented that the complication of selling those properties is the competition on that segment of the market. To be able to understand what I mean, I have included a chart where, as a function of the selling price, it can been seen the estimated number of properties for sale, the number of sales and the percentage of sales per range. Here is where one can see that on properties on top of two million euros that percentage of sold properties versus the ones in the market is only 1,86 % a quarter that is extremely low. Only the ones with the best price vs quality relation will sell. If there are 150 properties for sale in a particular price range, only 11 will sell in one year. Among those 150 there will always be 10 to 12 properties that reduce its price affected by a divorce or separation, any kind of finan-cial problem, the deceased of someone, or, simply, that the owner is tired of having the property in the market for a number of years waiting for a buyer. Those are the ones that will sell among the 150 in the market. It is tough to assume but I have seen a number of spectacular houses recently that do not sell for this specific reason or simply put, the price is not too high considering the number of properties that specific house has to compete with. The question is the following: is it worth to wait for the market to recover, taking into account that Standard & Poors has anticipated increases of 2,5 % in 2016 and 4% in 2017, and reach the estab-lished asking price in a number of years or is it better to get your equity now and benefit from what that wealth can produce as an investment with a moderate risk portfolio, around 5 to 6 %, plus all the amounts saved on maintenance costs for that property?