How is sale of second hand properties vs new properties evolving

I thought this was an interesting exercise so I have devoted my monthly newsletter article to it. The results for Benahavis can be seen on the attached chart.

 

In summary, in Benahavis the evolution is quite clear. During the pre-crisis years, developers were putting a lot of new properties in the market and they were being sold. Buyers preferred to purchase new properties, there were plenty of options and the price was not the main concern because prices were going up and no one ever imagined what was coming. At the same time, developers kept introducing lots of properties into the market so the conclusion is that most of the properties sold were new.

However, since 2009, the situation has changed radically. Most of the new developments were finished by that year and developers were reluctant to adjust prices to the market. Due to the strong falling of prices, it is easy for an individual second hand seller to adjust its price to the market than for a development company that has, in theory, to produce benefits and, in most of the cases, was financed by a bank that was not ready to accept a loss in its loans. At the end, the developers had to do it to be able to sell and the stock of new properties is going down since then because only a couple of developers, and mainly Taylor Wimpey in Los Arqueros, are bringing new properties to the market. The conclusion is that, right now, most of the properties sold are second hand.

 

On the other hand, the situation in Marbella is a little bit different. After the construction boom between 2000 and 2004 and specially once the crisis hit the area, there were not many developments incorporating product to the market so the stock of new properties has been declining since then. The evolution is quite clear: from 44% of new properties sold in 2004 to 11% in 2012.