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Costa del Sol Property Market Overview: Trends and Insights

Why the Costa del Sol Property Market is Ideal for Luxury Living and Family Life


Costa del Sol has solidified its position as a prime resort destination, drawing in both established elites and new affluent buyers from around the world. Marbella has once again been named the Best Place to Travel in 2024 by European Best Destinations (EBD), with Forbes also highlighting its appeal. The city earned this recognition thanks to its excellent climate, diverse outdoor activities, rich culinary scene, and unique lifestyle. Over one million travelers from 172 countries voted, choosing Marbella as Europe’s top destination, ahead of other popular spots like Monaco, Florence, Madeira, and London.

At the same time, expats living in Malaga agree: it's the best place in the world to live and work. According to Forbes, this conclusion comes from the latest InterNations survey, highlighting the city's growing appeal over the past two decades. The survey ranked 49 cities globally. Key factors considered included quality of life, ease of settling in, and personal finances.

Malaga, located on the Costa del Sol, not only led the overall ranking but also excelled in friendliness, climate, and work-life balance. Expats praised its safety, affordable public transport, and vibrant social scene.

Many families choose to relocate to the Costa del Sol, particularly to areas like Marbella, due to the exceptional educational opportunities and luxurious lifestyle available. The region boasts 37 international schools, offering a range of extracurricular activities, native-speaking teachers, and small class sizes to ensure personalized attention. Additionally, many schools provide convenient services like school buses, making daily routines easier for families.

The presence of high-end properties in the area further attracts affluent buyers seeking premium residences. This combination of top-tier education and luxury living makes the Costa del Sol a prime destination for families looking to settle in Spain.

There's a growing interest in newly constructed or refurbished properties that offer luxury, contemporary design, superior quality, and state-of-the-art technology.


Areal view of Malaga City

Market Indicators: Demand, Supply, and Pricing Trends


The "Golden Triangle" of Marbella, Estepona, and Benahavís witnessed an unprecedented sales boom in 2022. Sales volume in the Costa del Sol Property Market increased by 20% year-on-year, breaking all previous records. This surge mirrored trends seen across Spain, where real estate investment grew by a third compared to 2021, reaching €17.5 billion—a figure unprecedented in the country’s history.

Despite the increased cost of purchasing homes due to higher interest rates, less than 10% of luxury property transactions in Marbella—defined as properties priced over €2 million—involve mortgages. Notably, in 2023, the luxury property market in Marbella has been even stronger than in 2022, with some agencies reporting up to a 20% increase in sales at the highest end of the Costa del Sol Property Market.


Supply Constraints

As reported by Idealista, a top real estate portal in Spain, property listings in Málaga province have decreased by an average of 6% over the last year, and up to 40% in prime and super prime locations. This shrinking supply, alongside increasing demand, is pushing both asking and selling prices higher in the Costa del Sol Property Market, in line with fundamental supply and demand principles.


Price Increases in the Costa del Sol Property Market

Asking prices across all property categories in Marbella have risen by approximately 15% between June 2022 and June 2023, reaching a new peak of €4,233 per square meter—nearly double the average asking price a decade ago. 

Average price statistics for Málaga province, according to the Property Registry, show a 3.4% increase for new properties and an 11.2% increase for resale properties. However, official statistics for new properties only account for properties where title deeds have been issued, excluding off-plan and under-construction sales.


Future Price Predictions for the Costa del Sol Property Market

A June 2023 report by the Bank of Spain highlighted that, despite rising mortgage interest rates, factors such as limited new construction, high construction costs, and the favorable financial situation of buyers are expected to keep property prices stable or even increase. While the post-pandemic surge has slowed, and inflation has decreased to a core rate of 5.9% in June 2023, it is anticipated that prices will continue to rise, albeit at a more moderate pace.


Contemporary luxury house in Marbella

Who is Buying property in Costa del Sol?


While Spanish buyers continue to be central to Marbella's real estate market, foreigners now account for at least 90% of purchases for properties priced over €2 million. In Andalucía, foreign buyers make up 15% of all real estate transactions, a figure that rises to 34% in Málaga province. The British lead these foreign investments, representing 16% of all transactions, followed by Swedish and Dutch buyers, contributing 12% and 8%, respectively. Belgian, French, and German buyers are also significant players.

Interest from Swedish and Norwegian buyers has notably increased, with these groups steadily gaining market share in recent years. The Polish and Eastern European markets have also expanded, driven by a desire for a warmer climate and the appealing lifestyle offered by areas like Marbella.

Since 2022, a stronger dollar relative to the euro has led to a significant rise in property purchases by U.S. citizens, highlighting Marbella's increasing global appeal. This growing interest from American buyers is further evidenced by United Airlines' introduction of direct flights from New York to Málaga, making the region even more accessible.



Málaga, the Silicon Valley of the Andalusian Mediterranean

A growing number of foreign companies are showing interest in establishing themselves in Málaga TechPark. This trend is easy to understand, as the park not only offers optimal working conditions, such as high-speed Internet connections, modern infrastructure, and ample networking opportunities, but also another major advantage, especially during the autumn and winter months: its excellent climate. In fact, the sun shines for around 320 days a year on the Costa del Sol.

Málaga is home to 60 international companies, employing professionals from over 30 countries. In total, around 630 companies, more than 150 start-ups, and just over 20,300 people work in Málaga TechPark, earning it the reputation of being the Silicon Valley of Europe. It is no surprise that major multinationals like Google, TDK, Ericsson, Accenture, and Vodafone have chosen this Andalusian tech park for their headquarters and research and development centers.

Málaga has become the first city in Spain to receive the AENOR certification as a Digital Nomad Destination. Digital nomads boost the growth of the destinations they choose due to their consumption power, knowledge, and technical skills.

To award this certificate, the AENOR audit team evaluated, among other factors, the quality and variety of services provided to digital nomads, as reflected in their own assessments. This, combined with the city's context (communications, business and tech environment with the presence of international tech companies, climate, friendliness of the locals, etc.), positions Málaga as an attractive destination in many facets for different types of nomads.

By 2035, it is expected that at least 1 billion people worldwide will work in locations far from where their companies are based.

Málaga's efforts in recent years to become a technology hub have materialized in the attraction of significant high-tech centers such as the Andalusian Cybersecurity Center, Google’s center of excellence, Vodafone’s Innovation Center, and the future site of the Inter-University Microelectronics Center. All of this has been made possible thanks to the excellent public-private collaboration that has created the ideal environment for attracting projects and investment.


Sources:

Analysis from the Colegio de Arquitectos de Málaga.

Statistics from the Property Registry.

Malaga WorkBay

Idealista (2024)

Idealista (2023)

European Best Destinations (2024)

Forbes (2023)


Written by Silvia Menéndez Burgos




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