Property market realigns as total deal value falls and residency pause weighs on confidence 

Gibraltar’s property market is in realignment, buoyed by treaty optimism but weighted by temporary suspension of residency applications, real estate agents have said, with the total deal value in the last financial year down by over 40%. 

In the last financial year, Gibraltar’s real estate agents closed deals worth £202.2m, a significant reduction from £366.5m a year prior, with the number of transactions down from 638 to 344. 

Since the Covid-19 pandemic, which saw prices rise dramatically between 50% to 100% in the space of a couple of years, the market has taken a downturn realigning after this Covid boom. 

When a political agreement on the treaty was reached in June 2025, estate agents saw an increased appetite with enquiries from potential new residents signalling an uptick in the market. 

Residency applications soared to 3,000 - three times the annual average - and the Government temporarily suspended new applications on October 6 last year and this has not yet been lifted. 

BMI Group Managing Director Louis Montegriffo, Savills Gibraltar Director Aidan Montero, and Chestertons Director Mike Nicholls told  the Chronicle about the impact the political agreement and residency applications’ suspension has had on the local property market. 

Mr Montegriffo said that the treaty announcement in June last year saw the market regain some momentum, which was tempered by the pause on residency applications in an oversaturated market. 

“The biggest issue at this stage is the pausing of the residency,” he said. 

Residency applications have been paused since October, a move Mr Montegriffo said had created further uncertainty for buyers and estate agents. 

Mr Montegriffo said that, solely thinking with a business focus, the pause on residency applications is bad for the market, but he understands why the Government needed to take this action 

"I'm going to say that, as much as it hurts my business, I can understand the instinct and the decision the government took only three months ago to pause to review this and rightly so,” he said. 

Mr Montegriffo said some prospective buyers had halted purchases or redirected interest to other jurisdictions due to the lack of clarity. 

He understood the Government of Gibraltar’s decision to pause applications, citing concerns about infrastructure and public services, as well as the scale of potential demand from the UK. 

“I can understand the instinct and the decision the government took to pause to review this,” he said. 

Mr Montero said the residency suspension was as if the Government “switched off the lights” on the market just when it was beginning to recover as confidence had improved following the treaty announcement. 

He said the lack of clarity around residency criteria meant some potential buyers were choosing to move on to other jurisdictions. 

“When applicants don’t have facts and it becomes complicated for them, they move on,” he said. 

He said that around 80 percent of enquiries his firm had received last year were from the UK, largely from entrepreneurs and retirees looking at low-tax jurisdictions. 

“What we are generally seeing is we are getting predominantly applicants from the UK,” he said, adding that they were comparing Gibraltar with jurisdictions such as Malta, Jersey, Dubai and Monaco. 

He said the pause in residency processing had caused frustration among applicants who had already bought or rented property and moved to Gibraltar. 

Mr Montero added that prices have fallen in Gibraltar by around 15% to 25%. 

“What it means is that, if you can buy at yesterday's prices with tomorrow's expectations, now is a very good time to buy,” he said. 

“What I mean by tomorrow's expectations are, in a market in which at the moment is a post-treaty environment, sellers' expectations are softer, prices have fallen, and sellers have also adapted to a new way of trading.” 

“Buying at yesterday's prices and selling at tomorrow's prices offers an opportunity for buyers today to trade in a softer market, in a much softer climate.” 

“Whereas selling at tomorrow's prices would be in a post-treaty scenario and we do predict that the treaty will have a big impact when it comes down to property.” 

Mr Nicholls said the political agreement in June had boosted confidence and prompted interest from overseas buyers, but that momentum stalled after the suspension of new residency applications on October 6. 

He agreed that Gibraltar is an attractive jurisdiction and, although he wished the temporary suspension had been planned better, he understood the Government’s decision. 

“We definitely understand the reasons why,” he said. 

“We can't make a loss. As we all know in the private sector, losses are unsustainable.” 

“That's the same for a country as it is for a business. It's all understandable. I think the confidence will return the moment we have a treaty and the residency rules are certain.” 

“I think we've knocked a bit of international confidence on this residency issue.” 

He added that it was been a “rocky year” for the sector and the suspension has meant that people are “shopping, not buying”. 

He added that confidence is there following the political agreement and that the residency pause has buoyed the rental market. 

“What are those people doing if they need to be here because they've secured a job?” he said. 

“They'll probably rent and so the rental market is pretty good because you're not staking hundreds of thousands on the property.” 

Mr Nicholls said this uncertainty had affected not only property sales but also the wider private sector, for example when it comes to recruiting staff who require residency to work in Gibraltar. 

“The private sector wants to employ people,” he said. 

“But at the moment they’re being told no, unless they already have a residency card or live in Spain.” 

He said there have been fewer transactions as buyers waited for clarity on the treaty and residency policy. 

“Certainty is everything,” he said. 

“Who’s going to leave their job in the UK or their tax residence in Switzerland and come to a jurisdiction where the rules might change next week?” 

Mr Nicholls said the Government had a range of policy “levers” it could use to manage demand once residency applications reopened, including minimum income thresholds for workers and higher wealth requirements for high-net-worth individuals. 

“They can cap or they can apply a filter,” he said. 

FUTURE 

Looking ahead, Mr Montero said he expects the market to shift back towards sellers once the treaty was finalised and free movement implemented. 

“Once we have free movement, it’ll be a very strong seller’s market,” he said. 

He added that more than 2,000 residential units were currently in the pipeline, but that developers need confidence for projects to proceed. 

Despite recent difficulties, Mr Montero said he believed Gibraltar’s property landscape would change significantly over the next five to ten years, with major developments such as Eastside and Victoria Keys reshaping the Rock. 

“It will be a very different place,” he said. 

Mr Montero added there had been some movement among local residents following the treaty announcement, with a number considering selling property in Gibraltar and relocating to nearby areas in Spain. 

“I had some calls from locals who were ready to sell and move to Spain,” he said, adding that some had already released equity and moved. 

He said the lower segment of the market could soften further as a result, while the restricted housing market was likely to remain resilient. 

Despite recent uncertainty, Mr Nicholls said the medium- to long-term outlook remained positive. 

“I think the confidence will return the moment we have a treaty and the residency rules are certain,” he said. 

“We’re nicely poised.” 

He said the domestic property market continued to function normally, driven by residents moving up or down the housing ladder and supported by gradually falling interest rates. 

“That domestic market is good,” he said. 

He added, however, that the domestic market accounted for only part of overall demand, with much of Gibraltar’s population growth over recent decades driven by people moving into Gibraltar. 

Mr Montegriffo said the market remained weighed down by global instability and the lack of treaty implementation, which he did not expect before late 2026. 

“I can’t see implementation of the treaty until September or October,” he said. 

Despite the challenges, he said Gibraltar had historically recovered more quickly than other markets during downturns and remained well positioned in the long term. 

“We recovered very quickly after 2008,” he said. 

“I think ultimately we will get there.” 

He added that there is an oversupply of small units, such as studios, but that the market for larger luxury properties is strong and that the restricted market is positive for locals. 

“I think if you compared Gibraltar to most other places around the world, I think the opportunities that there are here are unheard of and unseen in most places,” he said. 

Mr Montegriffo said Gibraltar is heading to a Monaco-style model, but with different dynamics as the rules will not be as stringent.  

“I think we have to be conscious and cautious of how many people can just come in and what that will deliver or not deliver and how it will impose on our infrastructure, our social services, et cetera, and education,” he said. 

He is positive of the future of Gibraltar and the sector, including investment in the local economy. 

“I think we need to understand what it is that the treaty is going to deliver and, I think, in general terms the view is that, economically, it's going to deliver potentially something quite impressive that will change Gibraltar dramatically,” he said.