INTRODUCING OUR NEW QUARTERLY UPDATES

Executive Summary: Gibraltar Property Market Update Q2, 2024

The Gibraltar property market has experienced a significant increase in the volume of properties available for sale and rent. There are 170 to 200 units for sale, a notable rise from the under 100 units in previous years. Similarly, rental availability has surged to 70-100 units from just 10 units a year and a half ago. This increase has led to a market slowdown and a slight realignment in property prices.

Property Prices:

General Market: Prices have decreased by 5% to 12%, depending on the market segment.
Prime Properties: High-value prime properties have maintained their rates at £9,500 to £10,500 per square metre.
Average Price: The average property price in Gibraltar is currently £860,000 to £870,000, a slight decrease from last year.

Property Yields:

Historically, Gibraltar has seen yields of 4.5% to 5.5% on buy-to-let investments.
Current yields have decreased to between 3.8% and 4.2%.
Buy-to-let investments now face competition from fixed-term deposits, affecting their attractiveness.

Market Drivers:

Oversupply: The increase in property volumes, especially studios, has contributed to the price adjustments.
Interest Rates and Inflation: These economic factors have also impacted the market.
Pending Treaty: The anticipation of a new treaty agreement is expected to bring stability and confidence to the market, potentially preventing further price decreases.

New Developments:

One Bayside Development: A new, low-density development with 57 units priced at £6,700 per square metre has been successful.
Future Developments: There is concern about high-volume, high-density developments currently under planning, particularly on Devil’s Tower Road, which may exacerbate the oversupply issue.

The Gibraltar property market is experiencing a slowdown, with an increase in property volumes and a slight decrease in prices. The market's stability and future growth are heavily dependent on the upcoming treaty agreement, which is expected to boost confidence and stabilise prices. Investors and buyers should consider the current market conditions, including the impact of new developments and economic factors when making decisions.

Listen to the Gibraltar Property Market Update for Q2, 2024 by BMI Group Estate Agents.

NB: At the time of recording this Podcast (16th May 2024) the Treaty / Agreement referred to was indeed in our view at imminent.

With the news of the snap UK election announced on the 22nd May 2024 to be held on the 4th of July 2024, our thoughts are that it is now very unlikely that an agreement is now likely before September 2024. We are still of the view that Gibraltar needs an agreement and that it will materialise. This pause in our opinion will continue to dampen the market as we are unable to give any long-term security and stability to our economy and therefore property market.

Welcome to the first quarterly Gibraltar Property Market Update from BMI Group Estate Agents.

After 26 years in business, we have acquired unrivalled knowledge of Gibraltar’s property market. Think of these updates as ‘real estate temperature checks’ that provide expert insight into how the local market is performing.

To best understand what’s happening locally, we must consider the global issues that impacted Gibraltar’s property market in 2023 and how those may play out in 2024.

Brexit Negotiations and Border Fluidity Concerns:

Uncertainty surrounding negotiations and border fluidity remains critical for Gibraltar. The ongoing talks and potential for a treaty could have significant implications for the property market, particularly if the outcome affects the cross-border movement of people and goods. A positive resolution might boost investor confidence and stimulate demand for residential and commercial properties.

UK Economy and Property Market Update:

The latest UK Economy and Property Market Update indicates subdued activity in both residential and commercial markets, with construction output expected to stagnate into 2024. Given Gibraltar’s close economic ties to the UK, trends in the UK property market can have a knock-on effect on Gibraltar, influencing investor sentiment and potentially leading to a cautious approach in the local property market.

Global Conflicts and Economic Dynamics:

The escalation of conflicts in Gaza and Ukraine, along with rising global instability, has led to increased interest rates and inflation, impacting global economies. These impact supply chains and translate into higher construction costs and living expenses. Whilst we have not exactly seen the investor caution that’s happening in the UK, one must take global geopolitical turmoil into consideration.