In the latest JamesEdition Podcast, CEO Eric Finnas Dahlstrom sits down with Smadar Kahana, Managing Director of Engel & Völkers Marbella, to unpack the city’s remarkable evolution.
Once seen as a quiet retreat for retirees, Marbella has transformed into a dynamic, year-round hub attracting a new generation of global high-net-worth buyers, a shift that’s pushed property prices from €1,500 per square meter to €5,000 and turned the Costa del Sol into a testing ground for how Mediterranean markets can reinvent themselves.
This conversation unpacks the economics, demographics, and lifestyle factors driving this evolution.
Key Highlights
- Demographic Transformation: The typical buyer profile has shifted from retirees aged 50-70 to younger families and professionals aged 35-55
- Market Resilience: Properties now range from €5-30 million, with Marbella demonstrating strong recovery capabilities during market downturns
- International Appeal: European, Eastern European, and American buyers are driving demand across different neighborhoods
- Year-Round Lifestyle: Unlike seasonal markets like Saint-Tropez, Marbella offers consistent quality of life throughout the year
- Infrastructure Evolution: New luxury hotels, restaurants, and international schools reflect the changing clientele
Smadar KahanaManaging Director at Engel & Völkers MarbellaMarbella has become an icon in recent years. If you look at Instagram, all the influencers have been here in the last three years. The infrastructure is aiming for the right clientele - you have Nobu, Gaia, Cipriani, all arriving recently. This evolution reflects what Marbella wants to be.
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Marbella’s Prime Shift: What’s Driving Global Demand?
Eric
Hi Smadar, it’s really great to have you here on the podcast today. I’m really looking forward to hearing everything about the Marbella luxury market. You’ve been there now for 20 years, I believe?
Smadar
A little bit more, since 2003. Yes.
Eric
Would be interesting to hear what brought you to Marbella in the first place.
Smadar
What brings most people here brought me as well. I was serving as international marketing director for a prominent company in Germany – a demanding position with two children and an intense urban lifestyle. The work-life balance there was heavily skewed toward work, with the stress that comes from city living.
I sought a fundamental lifestyle change – proximity to the beach, better climate, and the vitality that comes from outdoor living. I spent three years researching destinations worldwide before selecting Marbella. It remains the best decision I’ve made.
Eric
In terms of buyers, what are the main nationalities that you see today coming to Marbella?
Smadar
The buyer profile is incredibly diverse, there’s no single dominant nationality. We have Europeans seeking second homes with the lifestyle combination we’ve discussed. In recent years, we’ve also seen increased interest from clients in Eastern Europe, many of whom view Marbella as both a safe haven and a solid long-term investment.
Each area attracts different demographics. The east side of Marbella draws Belgian, Dutch, and German buyers, while Scandinavians and British clients gravitate toward Nueva Andalusia and Puerto Banús. Golden Mile remains the choice for those seeking prime locations – it’s about finding the right fit for each buyer’s preferences.
Eric
What would you say was a typical Marbella buyer then compared to now?
Smadar
The transformation has been remarkable. When I arrived, Marbella was predominantly Spanish, with typical buyers aged 50 to 70 – retirees seeking better quality of life with golf, year-round sunshine, and a healthier environment.
The market began shifting even before COVID, with more families relocating here. But COVID was the real catalyst – it fundamentally changed how people think about lifestyle priorities. The ability to work remotely made people realize they could choose where to live.
We witnessed an influx of families, which is reflected in the continuous opening of international schools to meet demand. The buyer demographic has shifted dramatically younger – today’s average is between 35 and 55, whether for permanent residence or second homes.
Pros and Cons of Marbella’s Rising Popularity
Eric
In your opinion, what are the pluses and minuses of these changes?
Smadar
Marbella’s international character creates an immediate sense of belonging. Within two weeks of arriving, everyone feels at home. It’s telling that one of the first questions people ask each other here is “when did you arrive?”
The younger demographic has transformed the infrastructure – sophisticated restaurants, exclusive beach clubs, and premium venues have proliferated. The educational landscape has evolved to meet demand. Everything has aligned to serve this new, more discerning clientele.
Luxury Market Evolution & Resilience
Eric
How has the luxury market evolved during this period, especially considering Spain had quite a severe crisis during the financial crisis?
Smadar
High-end demand intensified significantly during COVID. Business leaders and luxury buyers actively sought properties here. The supply responded accordingly. During the pandemic, properties at the highest price points – those that had been on the market for extended periods – were rapidly absorbed. Buyers sought homes with comprehensive amenities, as they wanted self-sufficiency.
At the €5 million-plus level, expectations include full amenities – gym, sauna, hammam, secondary kitchen, outdoor facilities. It’s become standard. The market now regularly sees properties between €10 and €30 million. Yet when you compare Marbella to similar markets – Saint-Tropez, Sardinia, comparable destinations – our price-to-value ratio remains highly competitive.
Eric
Did this kind of €10 million plus segment exist 10, 20 years ago?
Smadar
Twenty years ago, this level of luxury simply didn’t exist. Additionally, construction costs have evolved dramatically. In 2003, you could estimate building costs at around €1,500 per square meter. Today, for luxury construction, you’re looking at €3,500 to €5,000 per square meter.
Marketing Ultra-Luxury Homes (€30M) Globally
Eric
I saw you published this report recently about a large trophy transaction of about €30 million to an American buyer. How do you go ahead and market properties like that?
Smadar
Engel & Völkers stands virtually alone as a truly international company operating in Marbella. With nearly 50 years of market leadership in the mid-to-luxury segment and over 1,000 offices globally, we offer unparalleled reach. A client walking into our Fifth Avenue office in New York has immediate access to our Marbella portfolio. Trust is paramount in international transactions, and the Engel & Völkers name carries that credibility.
My background as an international marketing director serves us well here. We’ve built a marketing department of over 12 specialists, keeping us at the cutting edge. We operate on three levels – international, national, and local marketing. Our annual marketing investment exceeds €1.5 million.
Eric
That’s very impressive. If we take a transaction like that €30 million, what is the typical buyer’s motivation to buy?
Smadar
It represents a strategic combination. They’ve acquired an absolutely prime location – from an investment perspective, that’s always sound. A1 locations consistently hold value. It also serves as their second home.
We’re seeing increasing American interest in our inquiries. Europe has become more accessible price-wise for American buyers, and the market holds strong appeal. The concept of maintaining a European second home is generating significant demand from the United States.
Marbella’s Future: A Year-Round Lifestyle Leader
Eric
What would you say is a safe investment now in Marbella, especially considering market cycles?
Smadar
During the 2008 global financial crisis, Marbella demonstrated exceptional resilience. Among all Spanish markets, Marbella recovered first – within approximately six months, we saw buyers returning, particularly investors.
Real estate fundamentally remains a solid investment. For pure investment purposes, prime locations are essential. It’s often wiser to acquire a smaller property in a prime location than a larger one in a secondary area. These principles are universal in real estate.
Marbella has achieved iconic status recently. The social media presence alone tells the story – name any major influencer, and they’ve been here in the past three years. The restaurant scene reflects this elevation – Nobu, Gaia, Cipriani have all established presence here recently.
Eric
Where do you think Marbella is heading in terms of future growth?
Smadar
When considering Mediterranean second homes, you’re evaluating options like Monaco, Saint-Tropez, the French Riviera, Portofino, and Sardinia. Yet Marbella offers something unique – all these other markets, including Ibiza and Mallorca, are highly seasonal.
Visit Saint-Tropez three weeks before Easter – most restaurants and boutiques are shuttered. Marbella delivers consistent year-round quality of life. Golf is playable throughout the year. Beach running is possible every day. We experience only 30 to 40 days of rain annually.
Marbella benefits from a unique microclimate created by the Sierra Blanca mountains and the Mediterranean Sea. This provides intensive outdoor living year-round. No other European destination offers this combination. Many draw comparisons to California – there are lifestyle and climate similarities. But within Europe, our accessibility is unmatched – two to three hours from virtually anywhere on the continent.
Eric
What do you think are the main challenges for Marbella that comes with this growth?
Smadar
I believe that with the new plan of Marbella, some green areas have been released to be built. So we will have more space to offer in terms of living space. Maybe the traffic would be a bigger problem than it is today. We have traffic in July, August, where everybody is in Marbella. However, you don’t have traffic here all year.
I’m coming from Munich, and sometimes in Munich I need half an hour just to look for parking. We don’t have these problems. It’s really a short way from one side to another. We really have a fantastic lifestyle here.
What’s Next for Engel & Völkers Marbella?
Eric
What are the main things you focus on now to grow the business in the coming years?
Smadar
In the first seven months we did around 170 transactions, plus 91 additional reservations waiting to go to notaries. Forty-two percent of those sales were above €1.5 million. Our average selling price depends on the area – our average selling price in Marbella East for example is €1.8 million, while on the Golden Mile is around €3.5 million.
We opened two new sections. One is where we’re dealing with branded residences. We just released Hyatt Residences which is offering something unique where you can come with your kids, put your kids in the kids club, go to the gym or have a spa treatment all in your own community. Your apartment will be cleaned every day and you have restaurants. As a second home, it’s a lifestyle that is just to dream about.
We have our Private Office, which is the elevated way of buying real estate where you really treat clients as VIPs. All over the world by Engel & Völkers we have around 17,000 agents and just 300 agents are Private Office consultants, really international and working with family offices. It’s really the high end.
Luxury has a different definition today. It’s not what it used to be. The luxury is the experience of buying much more. Engel & Völkers is known for its very high quality services around the world and in Marbella as well. But we are always elevating this experience.
Closing Thoughts
Eric
Thanks a lot Smadar for this interview. Extremely insightful into the Marbella luxury real estate market.
Smadar
We want to see more and more clients coming here. We take care of them. I believe that your portal is very well known in the United States. Only in the United States we have 302 offices. So I believe our cooperation will grow within the years. We see more and more Americans coming here and they are welcome.
Eric
Thank you very much. I appreciate it.
Smadar
Thank you, Eric. It was a pleasure.
