- In 2021, the number of people in the world with assets greater than $30 million increased by 9.3%
- Knight Frank’s Wealth Report 2022 highlights that strong savings during the pandemic have facilitated an increased investment
The Wealth Report 2022 prepared annually by the international consulting firm Knight Frank, predicts good forecasts for the worldwide luxury real estate market.
The text indicates that in 2021 alone, five million individuals reached millionaire status worldwide. The development of the pandemic and its restrictions increased the savings capacity of this sector, reaching levels of wealth that have not been recorded for years.
Another indicator of the good health of the market is the increase in the Knight Frank International Residential Index (PIRI100) which rose by 8.1% during 2021 (the largest increase since the index was launched in 2008), while in 2020 the increase had been a lesser 2%. This encouraging picture is supported by the fact that the number of people with very high net worth (more than $30 million) increased by 9.3% in 2021 compared to the 2.4% growth that occurred in 2020.
In fact, as many as 82% of wealth advisors and bankers said that their clients’ wealth had experienced growth in 2021 and that savings accumulated during 2020 had facilitated an upward investment in the last 12 months.
Of one hundred markets tracked by Knight Frank, only 7% registered a drop in property prices, compared to 35% that saw their price rise. Rising asset prices, from housing markets to stock markets and luxury collectibles, have also helped to boost the fortunes of those with investment portfolios.
The consultancy forecast that trend will continue. As so, they predict that between 2021 and 2026, the world population of very high net-worth individuals will grow by an additional 28%, raising the global figure from 348,355 to 783,671 from 2016 to 2026.
The aforementioned report also reveals that almost two thirds of the wealth of this type of client is allocated to properties and less than a third is kept in capital/second homes. The remaining share is invested directly or indirectly in investment properties.
The National Market
In its Real Estate Market Report 2022, Diana Morales (DM) Properties, exclusive partner of Knight Frank in Marbella, also analyses the situation of the Spanish real estate market, highlighting that during 2021, foreigners bought 10.8% of the properties sold in Spain. With the British occupying the first position in the ranking with 11.01% of sales, the Germans (9.59%) and the French (7.62%) closely follow their position.
This profile changes if we talk about new properties. In this case, the top three positions are taken by Belgians with 33.7%, Norwegians with 31.82% and Dutch with 24.19%.
Andalusia
In the Andalusian community, foreign buyers accounted for 11.48% of total property sales in 2021, a very similar figure to the one seen the previous year. Once again, the British are the main clients having acquired 16.7% of them, followed by the Swedes with 10.28%.
Marbella, one of the strongest markets
According to Diana Morales (DM) Properties, the Costa del Sol town is one of the most sought-after markets with the best growth forecasts.
In the city of Marbella, according to the PIRI report by Knight Frank, property prices rose by 5% in 2021, in line with the vast majority of markets studied by the firm.
Pia Arrieta Morales, partner of DM Properties, points out that currently “there is a domino effect trend where the decrease in the supply of properties in privileged locations causes significant price increases and a search for offers in neighbouring towns.”
What is the buyer with high purchasing power looking for in Marbella?
DM Properties have detected a series of specific characteristics of buyers who are interested in the city. On the one hand, they point out that there is an interest in renovated and furnished contemporary villas, or on the other hand, in new construction and off-plan apartments, an area in which they plan to obtain profitability in resale. There is also a lot of interest in properties that have a biophilic design (inspired by nature and made with natural materials), that have a concierge service and that are sustainable.
Another type of highly demanded homes are those built under the umbrella of a world-renowned brand, in line with a phenomenon on the rise in Marbella, with firms such as The Four Seasons, Fendi Casa or Karl Lagerferd, among others.
As for the profile of the buyer in Marbella, it has not seen as great of a variation as that of previous years. The UK market continues to lead with 16%, followed by Scandinavians with 14% and Belgians with 9%.
The city has also benefited from the new boom in teleworking, therefore, many families, mostly from northern Europe, have chosen the city as their new home. The good infrastructure of the area and its extensive network of international schools is another aspect that attracts the foreign population.
As far as the preferential areas around Marbella are concerned, the depletion of stocks in areas such as Nueva Andalucía, Sierra Blanca, El Madroñal, La Zagaleta and most of Marbella’s Golden Mile should be highlighted. It is for this reason that prices in these areas have seen an increase.
As a result of this, DM Properties affirm that there is a growing interest in the eastern area of Marbella (from Río Real, Los Monteros to Santa Clara), as well as Monte Mayor and Los Flamingos, in Benahavís, due to the huge popularity of its neighbouring Marbella Club Golf Resort.
Pía Arrieta Morales admits that this accumulated demand “is now largely satisfied“. Despite this, she considers that “the high end of the market will continue its strength in the future, however, it will probably grow at a less frenetic pace and we will see a slowdown in the price of properties”.
