Malaga continues to attract real estate investors
The CBRE consulting firm highlights the developments of Teatinos, La Térmica or Colinas del Limonar in the capital and cites Estepona, Mijas, Fuengirola or Marbella
The demand for housing in Malaga reached in 2018 the highest point in the last decade, both in the province and in the capital, and has adjusted “softly” in this 2019 that has just concluded, according to the report Keys of the Residential Market published recently by the consulting firm CBRE. 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 city. However, the values are still far from the maximum levels registered in 2007. According to the Ministry of Development, the price per square metre of free housing in the third quarter of 2019 was 1,825 euros, compared to 2,348 euros at the beginning of 2008. In Malaga city the current average value is 1,722 Euros, also below the 2,366 Euros of that time.
“The average price of housing at a provincial level is above the price recorded in the city of Malaga, which is indicative of the dynamism of the municipalities on the coast that are driving up the average price. However, in the city of Malaga, the price increase in the Central area stands out, as well as in the new luxury developments, which have significantly boosted the unit price in these areas”, the analysis highlights. Thus, 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.
In terms of purchases and sales, the Malaga market began its recovery in 2014 with an average annual growth rate of 12% (similar to the provinces of Seville or Alicante). In 2018, transactions exceeded 34,000 units (the highest figure in the last decade), and this year, at the height of the third quarter, there are around 23,000, so it is almost certain that 2019 will close with a somewhat lower figure (around 32,000). Malaga city, Mijas, Manilva and Estepona concentrate half of the total housing in the last year, which shows “a relevant dynamism attracting developers.
With respect to the activity of the real estate sector, the indicators of new construction permits show “a positive evolution and point to “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 new housing segment. 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 in attracting developers and investors”, says the consultancy firm, which believes that, 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 an alternative for luxury housing that could attract the foreign buyer who has traditionally invested in Marbella and has already been baptized as the golden mile of Malaga,” he says. The developments located on the Antonio Banderas promenade stand out in these areas, with the example of Picasso Towers’ project, which consists of three towers with 213 homes) “whose buyer profile is mainly foreign”.
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 Sociedad de Activos Provenentes de la Reestructuración Bancaria (Sareb) through its Socimi Árqura Homes. The locations chosen are Malaga city, 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 increased 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 recorded after the crisis (September 2013). In 2019 the growth has remained constant at 5% year-on-year. “It may be largely due to the boom in tourist housing. In many areas, long term leases (more common in times of crisis) have been replaced by shorter vacation rentals in high season,” says CBRE.
The highest average rental prices are found in the eastern 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 900) and in Carretera de Cadiz (with 960).