They have never been in the majority, but their presence has always been a boon to the real estate sector on the Costa del Sol. The Russians have been among the best customers for years. They were looking for the best houses on the beach or in the mountains. They wanted big halls, big rooms, lots of light, an indoor pool and a gym. And they always paid well. Now, after the invasion of Ukraine and international sanctions against his country, his presence in the golden triangle of Malaga, which forms Marbella, Estepona and Benahavís, has practically disappeared. “Operations have been reduced to a minimum,” says Kristina Szekely, head of the luxury agency that bears her name. “Their demand has almost completely disappeared,” they add from the Association of Quality Housing Entrepreneurs DOM3, stressing that the Russians are now a seller group looking for liquidity and have been replaced by other markets like the Polish.
The pandemic has sparked a revolution in the luxury real estate market on the Costa del Sol. The lockdown reminded the big lucky charms of what the Malaga coast had to offer. And they valued more classic factors such as the good weather or proximity to Malaga airport – which lost its four-weekly connections to Moscow due to the war – and the many private services the area offers, from schools and clinics to golf courses. According to the unanimous opinion of the sector, the last two years have been the best in the history of the region’s luxury market, but Russian citizens have disappeared from the equation. The armed conflict and sanctions against Russia took their toll. “They keep buying, but a lot less now,” says Jimmy Widen, founder of agency 3SA Estate.
You know it well in the most exclusive urbanization in Europe, La Zagaleta, a few minutes north of Marbella, where some of the most luxurious villas are located, with prices exceeding 30 million euros. According to General Manager Jacobo Cestino, after the invasion there was no acquisition of real estate or land on the site by people from that country. “We haven’t even had any contacts from Russian investors or brokers interested in real estate on their behalf,” adds Cestino, who believes this is due to the strict controls they impose on client assets. The manager of this privileged corner emphasizes that the demand of Russian citizens for luxury apartments “now practically does not exist”. Industry sources explain that the few people who have bought in the last year are residents of European countries or other countries like Dubai, but there are also those moving money from countries like Azerbaijan or Turkey to get it to Spain. In 2022 – the latest available data – just over 8,300 Russian citizens lived in Malaga, a thousand more than in the previous year. The majority – 2,481 – live in Marbella, which has everything from the media to Russian schools to “For Sale” signs written in the Cyrillic alphabet.
The 2023 Marbella Property Market Report prepared by Diana Morales Properties shows that traffic from Russia to its website had increased by 105% at the end of 2021 compared to the previous year, but also that demand has come to a complete standstill following the war on the Malaga coast. While in Spain already in 2022, Russians accounted for just two in every hundred acquisitions by foreigners – a number that the Association of Registrars said rose to 3% in the first quarter of this year – this is the case in the Costa del Sol now hardly relevant anymore and close to 1%. Low numbers in a market in Malaga where, according to the registry, one in three houses is bought by foreigners. Mainly from Great Britain (16%) and Sweden (12%). The Netherlands (8%) has become the third most important country of origin. Another study, by Panorama Properties, concluded last year that Russia’s purchasing power is “very limited.” “The sanctions, combined with the difficulty or impossibility of opening bank accounts for non-resident Russians, have further diminished this market sector,” says Christopher Clover, head of this luxury real estate agency, which opened its doors in 1970. The offices are in Puente Romano, in the heart of Marbella’s Goldener mile, close to the luxury of Puerto Banús and the history of the Marbella Club Hotel.
“Golden Visa”
A square meter can cost 25,000 euros in the area, a favorite for Russian citizens, most with the profile of businessmen with large checking accounts, far from the oligarch stereotype. “They always looked for the best: either on the beach or on the mountain with the best view. You like the good. But last year I didn’t have a single customer from there,” says Kristina Szekely. Nueva Andalucía or La Quinta were also favorite areas of these citizens, who, moreover, could obtain the golden visa when buying houses for more than 500,000 euros, as 806 people of the Eurasian giant did between 2013 and 2019.
However, Marbella does not miss them. His brand has established itself as one of the most important in Europe for second homes and, after the pandemic, also for first homes. With the decline of the Russian market came the increase of other citizens who have taken their place, especially from the neighboring countries of Russia or Ukraine, who are looking for security. “Mainly from Poland,” says the DOM3 association, but also from other places such as Lithuania, Latvia, Estonia or Romania, as shown by data from Panorama Properties. “While in other cities in northern and central Europe the recession has started to take its toll as a result of the Russian invasion of Ukraine and rising interest rates (among other events), Marbella has emerged stronger and is posting significantly higher growth numbers than its competitors,” stresses Diana Morala Properties.
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