Madness on housing market in Malaga province and Costa del Sol: Highest figure since 2007
Málaga 2022 – Due to the continued arrival of international investors and the desire of many after the pandemic to move, 54 percent more homes were sold in the first quarter than a year ago on the Costa del Sol.
The craze to buy a house in the province of Malaga has erupted. In the first quarter of this year, 11,165 transactions were carried out in the province. That’s a 54% year-on-year increase and the highest figure since 2007, the last major fiscal year before the real estate bubble burst.
Per day 124 houses were sold
In the first three months of this year, 124 houses were sold per day, according to data published Friday by the National Bureau of Statistics (INE). Both the second-hand market and the new-build market experienced significant growth. Last year, 5,172 second-hand property sales were signed and this year there are already 8,510, 65% more.
The province of Málaga accounted for a third of home sales in all of Andalusia in the first quarter of 2022, followed at a distance by Seville with 6,163, practically half, and is fourth in Spain behind Madrid (22,467), Barcelona (16,446) and Alicante (12,163).
Málaga and Alicante in the lead in housing sales to foreigners
Málaga also shares with Alicante the fact that both lead the sales of homes to foreigners throughout the country. They have been doing it for years and the trend continues.
Why this strong upturn?
Violeta Aragón, general secretary of the Association of Builders and Promoters of Malaga (ACP), attributes the strong upturn to two reasons. The first is that many people from Málaga, due to the pandemic and the lockdown, have decided to change homes. They have started looking for another house with more outdoor space, a pool, balcony or terrace instead of the flat, in which they felt very confined during the lockdown.
“After the pandemic, people value their living space more and see their housing as more than just a place to sleep,” Aragón explained.
The second reason, according to the general secretary of the ACP, is that “Málaga is in the sights of many national and international investors for several reasons. “Numerous companies, especially technology companies, with many employees who need a house to live in temporarily or permanently are coming to Málaga.”
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Moreover, because of the pandemic, telecommuting has now become an option promoted by more and more companies, allowing many people to live in Málaga while working for a company located many thousands of kilometers elsewhere.
On the other hand, Málaga remains an important destination for both residential and short-stay tourism. In the former case, foreigners buy houses to spend long periods on the coast or for retirement. In the second case, more and more companies are buying houses and entire buildings to refurbish and market them as homes for tourists or for long-term rental. One example of this is Casavo. This company has several investment funds behind it and has announced that it has 10 million euros available to buy apartments in different parts of the center of Málaga. The intention is to renovate them and sell them for a higher price.
“Housing is one of the great havens for investors and there is a lot of pressure in Málaga,” stresses Carlos Rueda of real estate portal Idealista. He adds that he speaks to many developers from Barcelona or Valencia who find that the municipalities there are starting to put obstacles in the way of construction, so they are shifting their course to Málaga.
Price at maximum level?
The number of sales is rising and so is the price. This is now at the maximum level in the province at 2,551 euros per square meter. It is 10% more than a year ago.
In April, the historical maximum price was reached in 17 municipalities: the city of Málaga (2,225 euros per square meter), Alhaurín de la Torre (1,790 euros), Benahavís (3,818 euros), Benalmádena (2,424 euros), Cártama (1,568 euros), Casares (1,968 euros), Estepona (2. 542 euros), Fuengirola (2,595 euros), Istán (3,704 euros), Manilva (1,861 euros), Marbella (3,581 euros), Mijas (2,245 euros), Monda (1,582 euros), Ojén ( 2,696 euros), Rincón de la Victoria (2,072 euros), Torre del Mar (2,074 euros) and Viñuela (1,792 euros).
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New bubble?
Could we be dealing with a new bubble? Violeta Aragón thinks not because at the beginning of the century the bubble was financial, since banks gave all kinds of facilities to buy a house and even finance it above its value.” Now the situation is different. The banks give at most 80% of the amount of the value of the apartment and that requires the buyer to contribute at least 20% down payment.
Young people out of the game
Translated into euros, such a down payment is a fortune, about 60,000 euros on average, and not everyone has that. In fact, two groups emerge: those who can buy and those who cannot. And among the latter are mostly young people, who are light years away from emancipation. “Solutions must be found for young people, because under the current conditions, prices will continue to rise for a while,” says Aragón.
Renting, moreover, is becoming more and more complicated because rents have also skyrocketed – sometimes the monthly costs to rent are higher than with a mortgage. Young people only have access with help from their parents or when sharing an apartment.
