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The five panellists with moderator Jennie Rhodes of SUR in English. Salvador Salas
SUR in English roundtable

The Costa del Sol, an enviable place to live offering a safe investment

SUR in English, Mijas town hall and experts from the property and investment sectors came together to discuss investing on the coast

Friday, 23 February 2024

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The Costa del Sol is a safe bet when it comes to investing in property and the destination has been a firm favourite among foreign investors for decades. Proof of this is that towns along Malaga province's coast have dedicated foreigners' departments and councillors.

Mijas town hall is no exception; in fact, its foreigners' department will be celebrating its 40th anniversary next year. With this in mind and at the heart of welcome speeches given by Mayor of Mijas Ana Mata and Editor of SUR in English Rachel Haynes, the Mijas - Safe Investment and an Enviable Lifestyle in Southern Spain real estate roundtable got under way last Friday at the town's La Zambra Resort.

Experts from the sector

Lourdes Burgos, Mijas Town Hall

"The administrations are working very hard to find solutions to the drought and there is enough water for summer until October"

Juan Goñi Uriarte, Klic Arquitectos

"The Spanish building regulations nowadays oblige almost zero consumption, so we have to go for it"

Marc Elliott, Fluent Finance Abroad

"Spanish banks are very open to speaking to foreign investors. Interest rates are calming down which is good news for investors"

Juan José Millán, Wyndham Costa del Sol

"Most foreign buyers don't use their properties all year round and digital nomads have helped the problem of seasonality"

David Sánchez, Arkitech

"Foreigners are very aware of the drought problem and there are systems to recycle water for gardening, irrigation and showering"

Five experts from the property sector discussed a range of topics which in their experience they know are important to potential buyers, be they planning to relocate permanently to the area, looking for second homes or interested in investment opportunities.

Topics included a changing profile of foreign buyer, including younger families and digital nomads; golden visas; affordable housing; communication; mortgages and banking; safety; and the challenges of climate change.

David Sánchez, CEO - investments / sales at Arkitech; Marc Damian Elliott de Lama, owner and founder of Fluent Finance Abroad; Lourdes Burgos, town planning, housing and heritage councillor at Mijas town hall; Juan José Millán, Chief Strategy Officer at Wyndham Costa del Sol; and Juan Goñi Uriate, CEO of Klic Arquitectos, all contributed their knowledge and experience to the debate.

In her welcome speech, Ana Mata looked back over the almost 40 years of Mijas' foreigners' department and forward to the "enormous potential" and "strategic connections" of Mijas as a place "ready for foreign investment".

Ana Mata . SUR

Ana Mata, Mayor of Mijas: "Enormous potential and strategic connections make Mijas ready for foreign investment"

Mayor of Mijas Ana Mata welcomed participants to the event in English and Spanish. In English she spoke of the “enormous potential” and “strategic position” that Mijas offers investors and said that the roundtable provided a “unique opportunity to exchange views on the evolution and development” of the sector in the town.

Switching to Spanish, Mata said that the title of the event “couldn’t be more accurate” and that Mijas offers safe investment and an enviable lifestyle. She highlighted that according to the town hall ‘padrón’ census there are currently 31,477 foreign residents from 125 nationalities registered in the municipality, making up 33.35% of the total population.

The mayor went on to say that there are more than 8,000 Britons registered, making them the municipality’s largest single foreign community. In the last 20 years Mata said that Mijas has “witnessed an important increase visitors and residents”, leading to new construction projects.

Across its 148 square kilometres, Mijas is made up of three areas: Mijas Pueblo, the coastal area of La Cala and Las Lagunas, which is the historic town centre, where there are plans for a new municipal building to serve Las Lagunas and a space that will provide leisure and entertainment activities for residents.

Since she became mayor of Mijas in November 2023, Mata said that the council has authorised 29 large-scale building licences and 50 permits for minor works, showing that the town hall was ready for development.

The mayor concluded by saying that the town hall aims to provide, “efficiency and quality” and that it was open and ready to welcome foreign investment.

Mijas has long been a favourite destination for foreign investors and tourists, so Lourdes Burgos explained why she thought that was. Revealing that she is originally from Madrid, but like many, "fell in love with" and "chose to live in" Mijas, she was able to answer the question both as a councillor and also someone who had chosen to move to the town.

Burgos said, "The town hall really tries to help foreigners" and highlighted the work of the foreigners' office. She added that the town hall knows that it needs to provide quality services "such as cleaning and maintaining the beaches" to keep people coming back.

The councillor pointed out that Mijas is just 20 minutes from an international airport and of course people are attracted to the Costa del Sol because of the "almost guaranteed sunshine".

Types of property

The discussion moved on to the types of property that foreign investors are interested in and the experts agreed that while some people specifically want to buy a new, modern property, others are interested in buying an older building which they can renovate.

Juan José Millán of Wyndham added that "most buyers don't use the property all year round", so regardless of whether they buy a brand new build or an existing property, they often look to "use professional companies to manage the property and rent it out" for them.

He talked about branded properties - a concept he said that "gives credibility" and "certain guarantees and security to buyers" that the developers are internationally known. He referred to a number of existing examples of branded properties and hotels on the Costa del Sol, including ones owned by Wyndham and others owned by high-end retail brands especially in Marbella.

Golden visas

There is a lot of demand for "high-end villas" with the possibility for buyers looking to invest 500,000 euros or more to acquire a 'golden visa'; a visa which allows non-EU nationals to obtain Spanish residency.

There are several criteria that clients must meet, but they must be able to invest 500,000 euros in cash into a property purchase in Spain and that the house they buy must already be built. However, David Sánchez of Arkitech pointed out that it is "not an easy process" as there is "lots of bureaucracy and rules".

He added that the "average villa goes for way more than 500,000 euros" on the Costa del Sol so the opportunity to apply for a golden visa comes "automatically" with such purchases.

Marc Elliott of Fluent Finance explained that the golden visa investment can be "topped up" with a mortgage, either to buy or to renovate a property.

Mayor of Mijas Ana Mata addresses guests at the event.
Mayor of Mijas Ana Mata addresses guests at the event. Salvador Salas.

An important point that was made by Juan Goñi of Klic, and also picked up the other panel members, was the lack of affordable housing and the need for public and private sectors to work together to ensure that such property is available. The panel agreed that with many prices "through the roof" younger Spanish buyers are finding themselves forced out of the property market.

Councillor Lourdes Burgos commented that this is an issue recognised by the town hall and that one of the objectives is to build 500 units of cheaper housing.

However, she and Juan Goñi agreed that construction prices are extremely high at the moment, making it "difficult" to find private construction companies willing "to invest".

Digital nomads

In terms of younger investors, the panel agreed that the profile of foreign buyers moving to the Costa del Sol is changing; Marc Elliott of Fluent Finance referred to the rise in digital nomads or remote working since the pandemic.

"Covid meant a massive change in people's perspective of how they want to live their lives," he said and added that the offer of the digital nomad visa has opened up that possibility. He also pointed out that the "internet connection is fantastic" in Spain and that the cost of living is lower here than in countries like the UK and USA.

Juan José Millán of Wyndham added that the digital nomad phenomenon has also helped "the issue of seasonality" as property owners are able to find tenants all year round, rather than having them full during the summer months and empty for the rest of the year.

Another important factor for younger people with families when it comes to choosing where to live is schools; they want to know where the best international and state schools are and will make decisions on where to settle based on the education of their children. Everyone agreed that the Costa del Sol is a "very safe environment" to bring up children.

A safe bet

While the expression digital 'nomad' might suggest that such people move around and don't want to settle anywhere, Fluent Finance's Marc Elliott pointed out that even if they don't stay in the property all year, these professionals are "looking at investing their money wisely" and they see the Costa del Sol "one of the safest places to bring up their children". Many are "looking at long-term investments of five to 10 years while the children are at school and even after that they may even decide to stay," he said.

In terms of foreign buyers getting mortgages in Spain, Elliott pointed out that Spanish banks are "very open to speaking to foreigners". Foreign investment "is seen as a good thing," the panel agreed but Elliott said that as an investor, "you have to understand how Spanish banks work" and of course they are "cautious".

However, he added that it is the job of companies like Fluent Finance Abroad to act as the broker between mortgage lenders and buyers to make the process easier. "In Spain as a society and especially in Andalucía, people are more relaxed, more open and that is reflected in the banks," he said.

Sustainable properties

Another important factor for foreign buyers is sustainability and Spanish construction regulations mean that developers have to be looking at "almost zero consumption" when developing new properties according to Juan Goñi of Klic Arquitectos.

David Sánchez of Arkitech said that in his experience, sustainable solutions are a priority for foreign investors and that they "ask questions", wanting to know about "solar panels, water recycling" and other systems that can be used.

An unavoidable topic of conversation in the south of Spain at the moment is the drought that the area is experiencing. With water restrictions in place in many towns and villages in Malaga province and no significant rain forecast for the foreseeable future, David Sánchez pointed out that "foreigners are very aware of the drought".

However, he also said that there are many solutions that can be installed in houses "to recycle water for watering, irrigation and showering".

Lourdes Burgos added that government bodies at local, provincial, regional and national levels are "working very hard" to find solutions and announced that there is "enough water until October", guaranteeing supply for the coming summer months. Juan Goñi added, "This is a warning and we have to be prepared for the future."

Conclusions

At the end of the discussion the panel agreed that it is important for the public and private sector to work together to find solutions to make things better, but that the Costa del Sol and Mijas are "really well positioned" to face the future.

The panel highlighted that two of the main concerns for the sector are being prepared for climate change and the cost of construction which has an impact on building affordable housing.

Participants and organisers at La Zambra Resort.
Participants and organisers at La Zambra Resort. Salvador Salas

From a financial perspective, the message was positive and that following a rise in interest rates in 2023, they are "calming down", which Marc Elliott said, was "good news" for investors.

The Costa del Sol and Mijas will always be a safe place to invest. Guaranteed sunshine, good schools, excellent internet communication, an international airport on the doorstep and town halls geared up to help foreign residents, all contribute to the enviable lifestyle that the Costa del Sol has been able to offer for decades and will continue to do.

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