Despite a struggling economy that has put it in the same fiscally leaky boat as Greece, Ireland, and Portugal, Spain enjoys one bright spot—a robust luxury real estate market that seems to have powered through dismal international times.
Nowhere is this truer than along the Spanish Mediterranean, with its mild climate, numerous recreational activities, cosmopolitan flair, and an abundance of desirable properties. While Balearic Island destinations like Majorca, Ibiza, and Formentera possess a timeless allure all their own, more and more international buyers are drawn to the exclusive Marbella region and resort communities like Sotogrande, the sprawling Andalusian development just east of Gibraltar.
On the Costa del Sol, just a few miles outside of Marbella, Country Club La Zagaleta occupies more than 2,200 acres that was once the estate of billionaire arms dealer Adnan Khashoggi, whose massive home is now the community’s clubhouse. La Zagaleta boasts two renowned golf courses, along with a 23-stable equestrian club.
"It’s one of those ideal locations where you can enjoy the Mediterranean in a matter of minutes and then, just two hours away in the Sierra Nevada Mountains, you can be snow skiing in season," says Brennon Nicholas, of Nicholas Dunne Properties in Marbella. "That, along with the low crime rate and the exceptional year-round lifestyle, is what makes southern Spain so very attractive to international buyers."
Scandinavians, especially Norwegians, comprise a large part of the foreign market, says Nicholas, along with Belgium and Holland, with inklings of interest starting to come from North America, particularly among Canadians. And grand oceanfront estates are proving attractive to buyers from the Middle East. According to Nicholas, homes directly on the Mediterranean start in the $12-$20 million range and top out at about $65 million. A penthouse residence in a secure complex with views of Gibraltar and the coast of North Africa start at about $6 million, and a penthouse about a 10-minute drive inland with a partial sea view will go in the $2-million range.
"Even with prices holding their own against the economy, interest appears to be on the uptick," says Nicholas. "We have had more inquiries in the first three months of 2012 than we did in all of 2011."
One of Nicholas’s current listings is a 14,961-square-foot villa that sits on 1.2 acres of the La Zagaleta estate. Priced at about $9.2 million and located along one of the community’s golf courses, it comes with a gym, sauna, home theater, and expansive wine room.
Just a short drive to the west, Sotogrande, the largest resort community in the region, occupies nearly eight square miles and stretches all the way from the Mediterranean to the foothills of the Sierrra Almenara Mountains. Observing its 50th anniversary in 2012, Sotogrande is managed by NH Hotels and, along with a diversity of architectural styles among its residences, offers five golf courses, two polo fields, a racquet club, two beach clubs, a sailing club and a marina.
"Sotogrande seems to be drawing more and more North Americans, thanks largely to the wide sports and recreational offerings," says David Vaughan, of Savills (L&P) Ltd. "And more and more owners are choosing to use their homes outside of the traditional summer season because it stays fairly warm here—at least warm enough to get in the water—all the way through December. The population here swells from about 6,000 year-round to close to 20,000 during the summer season."
Prices at Sotogrande range from about $520,000 for a two-bedroom condominium near the marina to villa estates in the neighborhood of $14 million.
According to both Vaughan and Nichols, purchasing a vacation home in Spain is a relatively straightforward and painless process. As in any foreign transaction, selecting a reputable agent is crucial, along with an attorney. In general, figure to pay about 10 percent of the sales price in legal fees, transfer fees and taxes.
"In recent years, the Spanish real estate industry has become much more regulated and this, surprisingly, has resulted in a streamlining of the process," says Nichols. "For instance, our office had a recent $12 million transaction with a foreign buyer that closed in 10 days. It can be remarkably easy with the right parties involved."