02 Feb 16
Outlook & Market Update Gibraltar
Outlook & Market Update Gibraltar
IN BRIEF:
2015 has, as indicated in our previous market update and other writings over the year, proved
to be a good year for the local property sector. The year was primarily driven by new “off-plan”
sales with the launch of Midtown & Imperial Ocean Plaza in late 2014, followed by Ocean Spa
Plaza and Kings Wharf Quay 29 during 2015, all of which have mostly sold out!
This essentially set the scene and in part, has side-lined the existing stock of residential sales, which, to be fair was struggling in terms
of supply and availability, as well as an element of high price expectations from vendors.
All in all, a year indicating high demand, coupled with low stock with some over-pitched prices and leading to strong off-plan sales
over the period.
The data set out in the above graphic are based solely on BMI’s own sales and are, therefore, to be treated as only indicative of trends in the wider Gibraltar
market.
The data in respect of “average house price excluding high value properties” were generated by excluding the highest valued 10 per cent of properties sold
by BMI in each respective year.
NB. Note that the GDP graphic has no direct bearing or correlation to the information provided on average property prices and is purely an indicator with
regards to trends.
WHAT’S IN STORE FOR 2016?
• Our portfolio (one of the largest in Gibraltar) remains low in stock, with a slight improvement from last year –
we would say an increase of approx. 10% across the board taking us to an average of 115 units. Please note that
we do not include off-plan sales within this average, only available properties.
• Prices over the year have settled, as we indicated would be the case and as the chart above suggests. This was
to be expected given consistent increases over the past 4/5 years and the recent off-plan activity. We calculate
that any increase over 2015 will have been marginal (2%-3%) and we expect that 2016 will remain much the
same across most sectors within the market. We remain confident at the upper end where there is limited supply
and potential for higher demand.
• Off-plan sales clearly took centre stage in 2015. We expect there will not be the same proliferation of developments
in this sector, and consider this will be positive for the market generally, as further activity may lead to
over-heating with increased speculation.
Our view and forecast for 2016 is steady as she goes. We do not anticipate any major variations up or down in terms of prices
except possibly at the higher end, where low volumes of stock may continue to see some gain.
The off-plan market will be of particular interest to us and we feel may well play a key role, on how the market takes shape moving
forward over the next 36 months.
Off-plan re-sales will in our opinion be a good indicator of confidence or lack of and our focus will be on assessing whether or not
the market has over-exposed itself to weak speculators, and which developments may be more adversely affected by this.
Our thoughts on a developing 4 tier market (low, mid, high, ultra-high) as described over the past 24 months have been justified.
We believe that this serves as a positive indicator of the potential that the market enjoys. The very fact that we are attracting a new
ultra-high segment is the clearest sign of confidence from a new emerging market.
In general terms we are comfortable with the prospects for the year ahead, whilst observing with interest the speculation activity in
the off-plan sector as described above.
RATES PER SQM ACROSS THE BOARD ARE IDENTIFIED IN OUR TABLE BELOW:
SALES / RESIDENTIAL:
