Blue skies, 19 degrees and breakfast outside in November . . . the Costa del Sol has enduring appeal. The skyline is more crowded with high-rise cranes than Dublin and every spare hectare seems earmarked for development, writes Kate McMorrow.
The new six-lane highway has placed the region's hinterland within reach of the average hire car, so patches of hillside which would have been considered remote a decade ago are now sought-after for their convenience. Access is one of this region's best assets. Daily year-round flights from Dublin and Cork are still almost full and the new motorway has speeded up the journey from airport to resort. A high-speed rail service from Madrid and Seville is expected next year. Not for nothing is the Costa del Sol called "the California of Europe". A high level of sophistication means that residents can shop in designer boutiques and fashion chains at prices well below those in Ireland. People travel from Seville and further afield to buy homeware at Dunnes Stores, which has five stores on the Costa del Sol - one inland at Coin opened a fortnight ago.
Medical centres equipped have sprung up everywhere, including a number of plastic surgery clinics where a holiday can be combined with a makeover. There has been much talk about a downturn in the property market here and this is confirmed by the more reliable agents. The supply of ready buyers is drying up and large agencies with multiple offices are facing a lean time. Every corner you turn here there's an estate agency and the same re-sale properties feature in all their windows.
The general wisdom is that prices went artificially high during the boom years of the 1990s, when long-term owners enjoyed huge increases in the value of their properties. Expectations have remained high during the slide and a glut of resale properties has been created. In addition, the construction boom is adding to the situation, as owners upgrade to new developments with higher spec finishes.
Costa owners tend to move within the region, buying from plans in the hope of increased equity by the time the developments are finished. The sale of existing property incurs Capital Gains Tax at 35 per cent. That's on top of the agency fee, which can be anything up to 10 per cent in Spain.
Countrywide, prices are continuing to rise steadily, albeit slower than in the boom years. The average cost of a house in Spain rose by 17.3 per cent in 2003, according to a recent report from the European Central Bank. Well-located properties in the Marbella area rose by 27 per cent last year.
While speculators buying into greenfield sites could get burnt in the current market if they chose unwisely, it's unlikely that the Costa del Sol will lose its appeal.
For today's buyer, the uncertain market means prices can be negotiated downwards and a 10 per cent reduction is realisable if the vendor wants a quick sale. Location is crucial. Expect to add on about 10 per cent for legal fees and tax. Buying strategically, investors can still make good profits from off-plan schemes, getting in early and selling on before completion to avoid CGT.
Sandy beaches stretch for miles along the coast, packed in summer but perfect for walking in the mild winter months. Location is all-important on the Costa del Sol and the nearer to a fashionable beach resort, the higher the price tag.
On Marbella's prestigious Golden Mile, where Michael Smurfit, John Magnier and the Duquesa de Alba (the richest woman in Spain) own mansions, a tiny box-like apartment would set you back at least €600,000 if you can find one. There will be little change out of €2 million for anything with a pool in Puerto Banus, although apartments over the restaurants and shops on the noisy harbourfront occasionally come up for around €450,000.
Aside from the Golden Mile, Irish buyers favour Puerto Banus, Marbella or the golf valley around Nueva Andalucia, slightly cheaper because of its location a mile or so inland. East of Marbella, resorts such as Fuengirola and Riviera del Sol show signs of over-development and should be avoided.
Others like Elveria, Cala and Las Chapas have kept their core fishing village atmosphere and remain popular. Mijas, a pretty white village a few miles inland, is protected by strict planning laws from insensitive development. Choc-a-bloc with tourists in high season, it remains more or less unspoiled and is a good choice for those chasing after Andalucian character. Travelling west from Marbella towards Gibralter, upmarket Sotogrande has several top class golf courses, polo and water sports within its exclusive gated environs.
"People expect to earn too much from their property," says Mary Dunne of Property Partners Marbella. "There's definitely a slow-down but that doesn't mean the bubble has burst." Not content with running four branches of the company along the coast from Puerto Banus to Fuengirola, the Kildare woman is also a seasoned developer, who can turn bare mountain-side into prime real estate.
"At the end of the day, you can still make a nice little profit of 15 to 20 per cent - that's a reasonable amount anywhere," she adds.
