“Is the market swamped?” is a question we hear every day at Richardsons HQ. With constant rumblings over a Brexit Treaty, conflict in Eastern Europe and the seemingly never-ending headlines about inflation and interest rates, it can feel like the wrong time to buy or sell, but is the market really swamped? We take a look back through previous years’ pages of PropertyGibraltar.com to see how we fare with recent years.
Currently, as I write this, there are 579 properties being advertised on propertygibraltar.com. This rises to 659 if you include under offer. This means that roughly 12% of everyone looking to sell their property, is currently under offer (for comparison, London currently has an under offer rate of approx. 35% according to Rightmove)
With thanks to the WayBack Machine at web.archive.org, it is possible to take a snap shot of how this compares to previous years. In April 2023, there were 524 available listings. Lower, yes, but hardly alarmingly so. In April 2022 there were 529 – just 8.5% fewer than today. However looking back to April 2021 and 2020, there were 630 available listings on the day that the WayBack Machine took a snapshot; 9% up on today’s figures.
Bearing in mind all of the developments that have completed within the past few years, there is substantially LESS properties as a percentage of all properties in Gibraltar on the market than there were just 4 years ago.
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A fairly steady supply of properties over the past 5 years.
So Why Are ‘Under Offer’ Figures So Low?
There are a number of reasons why ‘under offer’ figures are low in Gibraltar at the moment and, anecdotally, it doesn’t seem to be a lack of buyers.
Buyer registrations are up on Q1 2023
Buyer registrations at Richardsons are up since the start of the year compared with Q1 2023. It’s probably fair to say that a good number of the current available listings (particularly among the nearly-new builds) are ‘speculative investors’, that possibly bought off-plan and are listing at intentionally high prices to see what happens. They tend not to be too concerned whether the properties sell or not and, if offers don’t match their business model’s exit-plan, will just rent them out.
According to one agents' research, average property prices shot up 72% between start of 2020 and start of 2022 (this is based on asking prices as actual selling prices are harder to determine in Gibraltar). An increase of that amount is unsustainable. Yes, inflation leads to average-wage increases, but not to that extent.
(Interestingly that same agents' data suggests prices had dropped back 15% by the start of 2023 - we would suggest it's pobably slightly less accute in reality)
With selling data less publicly available in Gibraltar as in the UK, we do (understandably) notice a trend of new listings following the pricing of the higher listed properties, but it’s only once the market has found it’s level and properties go ‘under offer’ can we really use them as comparables.
"If I had a pound for every time someone told me prices should double every 10 years, I’d be buying the properties rather than brokering them."
- Paul Gibbens, Sales & Lettings Manager
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Bank of England has suggested it will reduce base rate in August
It’s not all down to price though, there are uncertainties in our market – like any market – and people seem to be looking to mortgage rates and treaty agreements before jumping in. The Bank of England has suggested this week that it is looking to reduce base rate in August (with Gibraltar certain to follow suit) and there seems to be positive movements regarding the Treaty in recent days. As this pent-up demand from purchasers leads to increasing properties going ‘under offer’, the market will find its own level price-wise and that can only be a good thing. A moving market is a healthy market at what ever level prices are at, as it enables sellers – both investors and homeowners – to plan future moves.
It feels like we are nearing a precipice where the market will suddenly take off at any moment. If you’re considering selling over coming months, it’s likely to pay to get your property in the ‘shop-window’ early, so you’re at the forefront when this moment happens.
Is the market swamped? Not according to the statistics, but you want to be in it when it takes off.
