The reasons why Malaga competes face to face with London and Paris in the housing market
Malaga, the capital of the Costa del Sol, has made it to the top of the list of places to buy a house, after becoming a major tourist destination thanks to its climate, museums, cultural offerings and excellent communications. Many investors and property owners want to have a house in Malaga that competes in this sense with other large European cities.
Home buyers in Malaga are both national and international, particularly Scandinavians, Belgians and Germans.
For example, INE data indicate that the city has accounted for almost 7% of new home sales in the last five years, while only in the first quarter of 2019 has accounted for 28% of transactions involving foreigners, according to data handled by the registrars.
The coastal location and the proximity to other attractive cities such as Marbella or Granada has generated a demand especially in the center and east of the city. For example, an Israeli group has acquired twelve buildings in recent months in the city centre, and a Swedish investor is launching a residential development project in the Limonar district in the east of the city. Ministry of Public Works data show that the number of houses sold to foreigners in Malaga has been increasing every quarter since 2011.
Malaga follows in the footsteps of Marbella, attracting high income investors as it can offer the infrastructure that this group demands. Malaga airport has an area where you can park a ‘private jet’, and Puerto Banus, on Marbella’s Golden Mile, has a yacht docking bay.
The consultancy firm Wealth-X in a survey of some 211,000 investors with a net worth of over 30 million euros concluded that 15% invested in Spanish properties, mostly in Marbella, surpassed only by another Mediterranean enclave for the very rich, Saint-Tropez (France), and ahead of Monte Carlo (Monaco) and Porto Cervo (Italy).
The housing segment with a value of over 1 million euros is growing by 2% above the real estate market as a whole, mainly due to Russian and Asian investors, and the prices of houses sold in Malaga now clearly exceed the national average, with a gap of over 50%, for the first time, in the last quarter of 2018, according to data from the Ministry of Development, confirming that Malaga is attracting higher rents than the national average. At the end of last year, the province even managed to surpass those of Barcelona and Madrid.
The typical profile of many of the new home buyers in Malaga is that of a couple over 55 years old, Spanish or foreign, who are looking for a penthouse in the historic centre or the district of La Malagueta (eastern district) to use as a holiday home. The fact that Malaga has become fashionable as an urban tourist destination significantly influences the decision to buy. Malaga now competes with major European cities such as Paris or London in the second home market and is gaining ground in this attractive niche market.
Malaga is on the radar of Quartiers Properties for future investments on the Costa del Sol. We believe in the development of the region as a whole and of Malaga as a city, and we are currently evaluating several projects in Malaga. Listed on the Nasdaq First North index in Stockholm, we invest in both real estate developments and rental properties on the Costa del Sol.