The lockdown period enforced during the current coronavirus situation is effectively putting everything on hold – not just on the Costa del Sol but virtually everywhere. It affects many different parts of the economy, but in so doing this period of enforced inactivity is building up pent-up demand, which once released, will affect the market in one of two ways.
Sudden rush of demand
If there is a sudden surge of demand when the lockdown ends and everything returns to normal, this could lead to frenetic activity with a rush of enquiries and increased number of transactions for Marbella property. Agents would be rushed off their feet, and the initial tendency for property values to be checked or drop in the wake of the pandemic crisis would be quickly reversed. Prices would rise quickly and the market would be very buoyant for the duration of the surge, after which things would settle back into a more normal rhythm and the increase in property values would gradually slow down.
If the shock to the system is more profound and/or the restrictions on movement are lifted only slowly and gradually, this could lead to a very slow recovery. In this scenario, activity levels would remain subdued, growing at a slow but gradually increasing pace. Prices would begin to fall as it would feel like we’re in a recession, and this reduction in the cost of properties would begin to stimulate demand back to normal levels, though the process could take months or even a year before its full effect is felt.
Gradual return to normality
There is a third possibility, and perhaps this is the most desirable of all. If the market responds at a keen pace but accompanied by a gradual return of enquiries, business activity and transactions, then prices would likely remain largely stable and we would have neither the knee-jerk reaction of pent-up demand nor a slow and sluggish return to normality. Instead, we would ease back into a normal state of affairs without any major shocks, and at this stage it seems the preferred possibility.
Why are we so sure there will be a resurgence of demand? Because this has not been an economic hiatus brought on by financial problems or a decline in demand, but rather a health crisis that forced lockdown and the temporary muting of economic activity. Given this background, and the continued desirability of Marbella and the Costa del Sol way of life, this region remains as sought-after as ever.