Malaga continues to attract real estate investors

The high demand for housing in Malaga reached its highest point in the last decade in 2018, both in the province of Málaga and in the capital itself.

The CBRE consultancy, the Real Estate Board of Spain has highlighted that developments in Teatinos, La Térmica or Colinas del Limonar of Málaga, Estepona, Fuengirola and Marbella were at the centre of this rise.

It stated that in the period of the last four years, the price of housing has grown at an annual average of 4% at the provincial level and 6% in the case of Malaga capital. However, the values are still far from the maximum levels registered in 2007.

According to the Ministry of Public Works, the price per square meter of free housing in the third quarter of 2019 stood at 1,825 euros compared to the 2,348 that were to be reached at the beginning of 2008. In Malaga the current average current value is 1,722 euros, also below the 2,366 at that time.

In Málaga capital, the price increase in the Downtown area stands out, as well as in luxury new-build developments, which have significantly boosted the unit price in these areas”.

The average price in Marbella stands out from the rest of the municipalities, exceeding 2,500 euros per square meter. Fuengirola, Benalmádena, Rincón de la Victoria and Mijas experience the highest price increases in the province with average values of 8.5% compared to 2015 and 12% in 2019.

The activity of the real estate sector, the indicators for new construction permits show a positive evolution and point towards an expansion of the supply of new housing. However, current housing production barely represents 30% of the levels of the 1990s.

In the case of the capital, new developments in the districts furthest from the centre are setting the pace in this segment of new housing. The projects are concentrated in the area of Teatinos, Colinas del Limonar, La Térmica and the area of Puerto de la Torre. On the Costa del Sol, the municipalities of Estepona, Mijas, Fuengirola and Marbella concentrate the largest number of homes under construction.

Málaga Capital and the Costa del Sol continue to be very dynamic, attracting developers and investors, and with a view to the future of Málaga, the development of La Térmica will have a great impact within the luxury housing segment, in a location close to the airport and with very good connections.

This area is presented as a luxury housing alternative that could attract foreign buyers who have traditionally invested in Marbella and which has already been dubbed Malaga’s golden mile. The developments located on the Antonio Banderas promenade stand out in these lands, with the example of the Picasso Towers project made up of three towers with 213 homes, whose buyer profile is mainly foreigners.

The municipalities of the Costa del Sol also confirm their attractiveness, with Estepona, Mijas, Fuengirola and Marbella concentrating the largest number of homes under construction. CBRE also highlights the development of more than 2,300 homes by the Bank Restructuring Assets Company (Sareb) through its Socimi Árqura Homes. The chosen locations are Málaga capital, Estepona, Casares, Manilva, Mijas and Benalmádena. The delivery of homes is scheduled for 2023 and 2024.

As for the rental market, prices in the city of Malaga show significant growth, as a result of the tension generated between the increase in demand for rental housing and a very limited supply. The average income in the province of Malaga has experienced a rise of 50% from the minimum registered after the crisis (September 2013). In 2019 growth has remained constant at 5% year-on-year. This may be largely due to the rise of tourist housing. In many areas, long-term rental contracts have been replaced by shorter-term vacation rentals in high season.

The highest average rental prices are found in the East area, Colinas del Limonar, where most of the luxury homes are located with average rental prices of around 1,150 euros per month, as well as in central Malaga with an average price of around 900 euros and on Carretera de Cádiz with 960 euros.

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