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?