Buyers or sellers market:
Where is the balance of power?
February 2023 Market Forecast
Are you looking to buy or sell real estate in Costa del Sol? With the current changes and uncertainties in the global economy, it can be hard to answer this question: where is the balance of power when it comes to negotiations in the Costa del Sol real estate market?
You might expect that as a seller, you have more control over pricing and negotiation. On the other hand, you may think that as a buyer, with cash in hand, the balance will be in your favour. In this article we look at both sides of the equation - from researching local trends on pricing and sales activity to understanding exactly what power each party has when it comes to negotiating.
"Basic economic theory says that when demand outstrips supply, prices go up. Are house prices higher than they were two years ago? Yes. Are house prices better value now than they will be this time next year? I believe that will prove to be the case.” - Anthony Fernandes Founder of Lion Trust Spain
If you want a more in-depth version of what the market looks like check out our 2023 market forecast.
The proof of the pudding is that we still have investors coming into the market. They see the value in the market and view the Costa del Sol as a safe haven to deposit funds in property. ‘Market prices’ are still below that of the 2007 market high and demand continues. The major difference is that over the past 10 years there has been a larger percentage of buyers with full equity (no mortgage required) than in the proceeding years. That contributes to more stable market conditions.
Now is your chance to snatch up the perfect property before everyone else catches on!
In 2023, we believe that the real estate market is still on its way up. Finding your dream property in this climate can be quite competitive and those buyers who are actively searching while there aren't as many people around have a greater chance of success. By being prepared and ready to sign purchase contracts, you'll be more likely to secure the best properties at the best prices. Of course each negotiation will depend on the seller's motivation and circumstances that drive them to sell.
So ask yourself: Are you truly committed to investing in a property during this time period?
If you plan to purchase a property this year, make sure that your finances are in check - secure an “offer-in-principle” for any mortgages before you find a property. Those who aren't prepared with their funds ready will be wasting their own time as well as the valuable time of others. It's those buyers who have thoroughly considered all aspects of financing that stand out from among other potential purchasers; it is these individuals who acquire the properties they desire most.
A note for sellers!
Yes, it is a sellers’ market at the moment! But property owners who think they can successfully secure artificially high, random prices for their properties (unless they are sitting on something genuinely unique) are being misinformed, or being poorly advised by weak estate agents who won’t give a true market valuation for fear of losing the listing. All that happens is that your property sits on the market for longer, before you readjust to a more realistic price.
In the main, buyers are smart. They have done their research and are being advised by a trusted agent. They are looking at the comparables and can see the value in a property and where a premium is worth paying for a specific property. Given the current market conditions with high buyer demand properties priced correctly will sell quickly.
As a seller, if your property has been on the market for several months, chances are it is not priced correctly.
Want to know more about the real estate market in 2023?
Drawing on our two decades of experience in the real estate industry, we invite you to get a glimpse into what's happening with the market. Whether it be purchasing, selling or investing, having an understanding of market predictions can help make informed decisions.
If you're looking for more comprehensive knowledge about future trends and forecasts in this field, please feel free to download the 2023 Market Forecast below.
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