Gibraltar’s Property Realignment: Optimism and Insights

The property market in Gibraltar has experienced significant changes in recent months, reflecting a period of economic realignment influenced by external factors. This update, based on BMI Real Estate’s property market podcasts, provides valuable insights for investors, clients, and stakeholders. All quotes are drawn from the discussions led by BMI Group’s Co-Founder and Managing Director, Louis Montegriffo.

The past year has seen the market undergo a noticeable downturn, beginning around mid-2022. However, this downturn is better described as a "realignment" rather than a recession. Montegriffo describes it as "a recalibration of property values to meet realistic demand," driven partly by "an oversupply of properties coming on, people wanting to extract value on sales, which are no longer relevant."

Despite this realignment, no dramatic changes are expected in the immediate future. Montegriffo explains that while the adjustment is ongoing and fluidity in property sales has slowed over the past 18 months, the long-term outlook remains optimistic.

Central to this optimism is the much-anticipated agreement between Gibraltar and external stakeholders. While progress has been delayed, particularly due to the announcement of UK elections by Rishi Sunak, Louis remains confident. "We still take the view now, months later, that that is still going to happen," he said, highlighting the potential of the agreement to stabilise the market and boost long-term investor confidence.

Gibraltar’s resilience in the face of challenges has been a recurring theme in the BMI podcast updates. Montegriffo points to Gibraltar’s long history of overcoming political and economic hurdles, noting its strength and adaptability. Even amidst Brexit-related uncertainties, Gibraltar continues to offer stability and security to newcomers.

The economy remains driven by key sectors such as e-gaming, online gaming, and financial services, which Montegriffo identifies as essential to its success. These industries require protection and adaptability, particularly as any new agreement might necessitate adjustments in business models. From a property market perspective, he predicts that the agreement will bring renewed energy, although with tempered expectations. "We don’t necessarily feel that we’re going to see a huge growth in property prices happen overnight," he cautioned.

Expectations should remain measured. While dramatic changes are unlikely, the gradual return of fluidity in sales will signal progress. Montegriffo highlights the necessity of the ongoing realignment, which involves a 10%-20% downturn in values, as a vital adjustment for sustainable growth.

Throughout the discussions, Montegriffo underlines Gibraltar’s unique capacity for reinvention, noting that the property market’s evolution reflects this resilience. As challenges are met with thoughtful responses, Gibraltar’s property market offers long-term promise for those invested in its future.