INTRODUCING OUR NEW QUARTERLY UPDATES

Gibraltar Property Market Update Q2 2025

In the latest Property Market Update from BMI Group, Managing Director Louis Montegriffo speaks with David Revagliatte to assess the state of Gibraltar’s property market. The interview continues the group’s focus on transparency and informed analysis, tracking trends since the realignment began in mid-2022.

Montegriffo explains that little has changed since the previous update. The market remains subdued, with sales and rentals described as slow. He describes current conditions as a bear market that began in mid-2022, following a sharp rise in prices during the 2020 to 2022 period. That growth, he notes, was driven by high demand, Gibraltar’s tax regime and strong regulation, alongside limited supply.

Since then, prices have fallen by 15 to 25 percent. Montegriffo describes this not as a collapse, but a realignment after increases that, in some cases, reached 100 percent. He believes the market has likely reached the bottom of this cycle. “I’m not necessarily seeing prices coming down any further,” he says. With the right pricing, transactions are happening.

Confidence as a Market Driver

Montegriffo highlights several factors shaping the current environment. The most significant is the long-awaited post-Brexit agreement. The absence of a clear path forward since 2016 has created prolonged uncertainty. Combined with inflation and rising interest rates, buyer confidence has taken a hit. However, Gibraltar’s economy has remained stable.

“The biggest issue that affects any market, particularly the property market, is confidence,” Montegriffo says. Global instability and financial volatility have added to hesitancy, but he believes the slower pace has allowed the market to correct in a healthy way. The extreme pace of growth seen previously was unsustainable.

Rental Market Signals Resilience

The rental market, by contrast, is showing strength. Historically, both sales and rental prices have fallen during downturns. This time, larger rental units have held their value. Montegriffo says, “The rental market has done very well,” with continued demand for one- to four-bedroom homes. Studio flats are an exception.

He sees this demand for rentals as a sign of ongoing interest in Gibraltar as a place to live and work. It could also point to a coming recovery in the sales market. “Hopefully that will translate, once there is more confidence, into people buying those properties.”

Is Now the Right Time to Buy?

Despite the recent correction, Montegriffo believes now could be a good time for buyers to enter the market. While values have dropped, the highest rates per square metre from 2022 are still being achieved in frontline properties. Other areas have adjusted, depending on location and quality.

“We are certainly optimistic moving forward,” he says. There is value to be found, particularly for first-time buyers and investors. Falling interest rates have also reopened the door for buy-to-let investors. With yields recovering to over 4 percent, and capital growth potential in the long term, the case for property investment is improving.

A Unique Long-Term Market

Montegriffo notes that Gibraltar is not a low-cost market, especially for those entering from abroad. However, the territory remains attractive thanks to its strong employment sectors and appeal to high-net-worth individuals. “From a Gibraltarian perspective, you can enjoy purchasing in the affordable sector,” he adds, referring to the support available to long-term residents.

Looking to the next three to six months, he expects the market to remain steady. “Much of the same,” he says. The key variable is the agreement. If confirmed, it could boost investor confidence and offer Gibraltar a more secure profile for long-term buyers.

Although he does not expect a sudden boom, Montegriffo anticipates renewed activity in the medium term, especially from UK-based clients who have previously held back due to uncertainty.

Off-Plan Activity and Market Adaptation

BMI Group has been involved in many of Gibraltar’s off-plan developments since 2000. Montegriffo reflects on this history and the challenges now facing new projects. Many proposals are still tentative, floated to test interest rather than to launch immediately.

Among the few developments making progress are Midtown (final phase) and One Bayside. One Bayside took a different approach, undercutting the market to attract owner-occupiers. This pricing strategy helped the project secure sales and begin construction.

Europa Walks, another ongoing development, offers a contrasting model. It is low density, features villas and townhouses, and is self-financed. Sales are more measured, with no requirement for pre-sales before construction.

Studio Oversupply and Developer Caution

Montegriffo expresses concern over the volume of studio units in current proposals. He questions whether demand truly exists for so many small units and warns that developers need to re-evaluate their assumptions. “That’s been something that we’ve been concerned about for a long time,” he says.

He believes many developers are holding back due to unrealistic price expectations or market uncertainty. As the agreement solidifies and confidence returns, more projects may move forward.

Confidence and Resilience

Throughout this latest property update, confidence remains a central theme. “Very little to talk about, very little to see because of the period that we’ve been through,” Montegriffo admits, but he adds that Gibraltar has shown consistent resilience.

“We’ve got this ability in Gibraltar to come out of hurdles very well,” he says. The territory’s small size, efficient management and strong economy have helped it avoid problems seen elsewhere, including property repossessions, which remain rare.

Long-Term Investors Still Active

High-value clients and family offices have continued to invest during this quieter period. Montegriffo says BMI Group has handled several large transactions in recent months. These buyers are based in Gibraltar and are making decisions with a long-term view.

While the broader market may appear subdued, it is far from stagnant. “It’s been weak because it’s people just waiting to see what’s going to happen,” he concludes.

Montegriffo closes with cautious optimism. With an agreement now likely, the coming months could bring greater clarity and renewed activity. BMI Group will continue to provide updates as the market evolves.