Gibraltar Property Market Update: Rentals and Studios

The property market in Gibraltar continues to evolve amidst various challenges and opportunities. In this latest update, BMI Group’s Co-Founder and Managing Director, Louis Montegriffo, provides valuable insights into the dynamics of the rental market, concerns about the studio sector, and the implications for investors and residents alike.

The Rental Market: A Bright Spot

Over the past six months, the rental market has been a standout performer in Gibraltar's property sector. Montegriffo describes it as "our shining light, certainly within BMI, insofar as volumes and rentals being done." This activity contrasts sharply with the sales market, which has slowed due to prevailing market conditions. 

The rental market’s resilience is a positive indicator of Gibraltar’s continued ability to attract residents and high-value clients. "Rentals is a teller because, whereas people may be cautious to buy, they still need to be in Gibraltar," Montegriffo explains. This ongoing demand highlights the territory’s appeal as a desirable location to live and work.

Rental Prices and Demand for Larger Units

While rental prices dipped slightly in recent months, they have begun to stabilise and even recover. The increasing transaction volumes are driven predominantly by demand for larger properties, including two-, three-, and four-bedroom units. Montegriffo notes, "We're quite encouraged about that, and that is mainly surrounded or driven by large ones, two, three, and four bedrooms." This trend underscores the market's focus on family-sized accommodations rather than smaller units.

Persistent Concerns in the Studio Market

Despite the promising rental market, the studio apartment sector remains a source of concern. With approximately 1,000 studio units either built or under construction, they represent a significant proportion of properties available for sale or rent. Montegriffo has long raised concerns about this imbalance, stating, "We still remain concerned about the studio market in Gibraltar. We have been concerned now for many years."

The oversupply of studios, coupled with speculative investment behaviours, exacerbates the issue. Many young and inexperienced investors have been drawn to the perceived affordability and high rate per square metre of studios, often with speculative intent. "The concern is that there's a great many speculators, and I think inexperienced speculators, that may have been driven to purchase studios, hence why we see so many resales available," Montegriffo warns.

Speculative Investments and Their Risks

Speculation, when undertaken with informed understanding, is an acceptable practice. However, Montegriffo highlights the risks of speculative investment in Gibraltar’s studio market, particularly by individuals who lack experience. He remarks, "Speculatively and speculation has a wide scope. You can speculate as long as you're able to understand that you have to complete on a property." Unfortunately, the prevalence of speculative purchases has contributed to an influx of resale properties, signalling potential financial strain among investors.

Looking Ahead: Market Updates and Future Prospects

This update concludes with a reflection on the past months and a commitment to future updates when significant news arises. "In general terms, I think that gives a good round-up of where we are today," says Montegriffo, emphasising the importance of timely and relevant market insights. Anticipation remains high for news regarding potential agreements and their impact on Gibraltar’s property sector.

Season’s Greetings and Optimism for the New Year

As the year comes to a close, Montegriffo extends his best wishes to all, stating, "Wishing you all a fantastic Christmas period, which we're entering into now, and we look forward to speaking to you very soon in the new year." The BMI team remains committed to monitoring market developments and providing valuable insights into the year ahead.