Since then, Sotogrande has grown to become one of Europe's largest gated sports resorts. There are verdant polo fields, a modern marina to star-spot sleek yachts, five golf courses and a mix of homes from established villas hidden behind tall hedges to compact, waterfront apartments.
"Prices have dropped by an average of 30 per cent and as much as 50 per cent since their 2005 peak," said Michael Norton, of Sotogrande SA. "Yet this is a long-standing and secure resort with excellent infrastructure and established facilities. Owning a property inside Sotogrande adds 30 per cent to comparable properties outside the resort."
Sotogrande is not a stuffy expat golf resort. The year-round population of 3,000 swells to 20,000 in summer. Half of all owners are Spanish and the average age is 48: compare that with the equally golf-tastic and exclusive Quinta do Lago in Portugal, where the average age is nearer 70.
To a large degree, that is down to the nearby attractions of Gibraltar, an offshore centre with a clean legal reputation and a thriving financial industry. Many workers choose to commute 20 minutes there from Sotogrande with its well-regarded international school, plentiful space and more affordable property.
"Sotogrande was built on the three pillars of family, sport and security," adds Norton, himself a Sotogrande resident.
"There isn't great nightlife or a casino, for that you have to travel to Marbella, but it is an active resort for health-conscious people, offering horse riding, sailing, tennis — and of course, golf."
Reduced-price new-build homes
Completed new property for sale through Cluttons Resorts includes detached villas at Las Cimas de Almenara, at the highest point of the resort, which share facilities of the nearby hotel, one of three in Sotogrande. The last five of 18 four-bedroom homes start from £591,780, also through Cluttons Resorts (cluttonsresorts.com; 020 7584 3050) — identical villas in Phase I sold from £1.1 million in 2007 — and come with beautiful oak floors, recessed heating and cooling systems and a clean-lined, contemporary exterior.
Take advantage of resale value decline
The price falls on resale property have also been dramatic, down an average of 32 to 35 per cent with the biggest falls on apartments, according to David Vaughan, of Savills (savills.co.uk/abroad; 020 7016 3740).
"There is remarkable value to be had," he commented. "Unlike other parts of Spain, Sotogrande did not overbuild. The resort has been incredibly solid in the quality of what is on offer, and attracts a gloriously international mix of owners."
Savills has resale apartments in the port from £106,520. A substantial four-bedroom villa in secluded private grounds, with views across three golf courses and the Mediterranean, is £634,000 (pictured above).
Dream move: moving to Sotogrande from Fulham
Catherine Breheny, 32, moved from Fulham to Sotogrande in 2011 when her tennis coach boyfriend Nathan Rooney was offered a job at Sotogrande's Elite Tennis Academy. Two years on he is head coach and the couple are planning their wedding there in September.
"I do miss London but it is hard to imagine leaving here," said Catherine, a marketing consultant in Gibraltar. "The climate's perfect, the Spanish lifestyle is relaxed and there is so much to do. We have a good circle of friends our age and a busy social life."
Sotogrande's location makes getting back to the UK easy through Malaga or Gibraltar airports and the couple enjoy exploring Spain.
"Nathan proposed to me on a skiing trip to Sierra Nevada two and a half hours away, he went to Madrid to watch Real Madrid play and we are planning a trip to Seville," added Catherine.