Since the start of the tourist boom on the Costa del Sol in the 1950s, the region has appealed to foreigners not only as a holiday destination but also as an ideally located region to own a second home on the Mediterranean.
Spain’s sunshine coast has long been a popular travel destination. Its 160 kilometres of beaches, award-winning gastronomy, beautiful landscapes, year-round mild climate, charming white villages, wide variety of sports and fascinating traditions are just some of the reasons why increasing numbers of people choose to visit Spain’s most southerly coastline. The region has experienced spectacular growth in recent years. In 2018, 11.7 million tourists visited the region of Andalucía, accounting for 14% of all people who chose Spain as their holiday destination last year.
Most of the Costa del Sol belongs to Málaga Province, which incorporates popular towns such as Torremolinos, Fuengirola, Estepona, San Pedro de Alcántara, Mijas and Benalmádena. Marbella is probably the most well-known town along the Costa del Sol. Once a former fishermen’s village, it still preserves its historic centre but is more renowned as Spain’s number one party destination, thanks to its proximity to Puerto Banús and its vibrant restaurant and nightclub scene. Moving inland, you find picturesque villages such as Ronda, Gaucín, Ojén, Antequera and Casares. The Port of Málaga is one of the oldest in Spain and is a regular destination for luxury cruise ships bringing in thousands of tourists every year.
Since the start of the tourist boom on the Costa del Sol in the 1950s, the region has appealed to foreigners not only as a holiday destination but also as an ideally located region to own a second home on the Mediterranean. According to the latest data from the Spanish Land Registry, around 9,200 homes were sold to international buyers in Málaga Province during 2018, representing 28% of all buyers within the province. Sales to foreigners in the province has more than doubled since 2012 when there around 4,300 sales transactions. The year when there was the greatest proportion of foreign buyers was in 2014 when they accounted for 34.5% (approx 7,500) of total sales. This was the year when most Spanish regions had seen prices bottom out and when the national market was at its slowest.
Looking at buyer nationalities, the British continue to be dominant in Andalucía.
There was a slight dip after the UK referendum in 2016, when UK buyers slipped from representing 27% (approx 3,200) of all sales in Andalucía in 2016 to 21.5% (approx 2,600) in 2017. However, the proportion went up again last year when they represented 22.5% (approx 3,000) of all foreign sales followed by the Swedish (10%), Belgians (8%) and Morrocans (6%).
In the whole of Spain in 2018, Málaga Province (28%) ranked fourth after Alicante Province (40%) Tenerife (37%) and the Balearics (30%) as the region with the highest proportion of foreign buyers.
Looking at the market overall, Málaga Province also ranked fourth in the list of Spanish provinces with the highest number of total sales in Spain in 2018 after Madrid, Barcelona and Alicante.
There has been a slowdown of the market in the first half of 2019, when provisional figures show there were 15,893 transactions in Málaga Province, but in comparison to the same period in 2013, a period when the market was at its slowest for both national and international buyers, sales have almost doubled (8,359 transactions). However, sales are still down by 27% compared to the first half of 2007, when there were 21,979 sales transactions and the market was at its peak.
Prices in Málaga Province have seen strong growth since midway through 2014 when property prices averaged €1,477 per square metre. In the second quarter of 2019 prices averaged €1,815 per square metre, an increase of 23% compared to five years ago. However, they are still 20% less than the average property price of €2,270 per square metre in the second quarter of 2007.
Since the start of 2013 many new projects were launched on the Costa del Sol, in response to the growing demand for higher quality homes with modern features. These contemporary projects have been driving the market forward and also pushing up prices. More recently, however, there has been a slight shift in buyer habits. Some investors are choosing to renovate older homes which tend to offer more square metre per Euro than new builds. Renovations also offer decent investment potential as long as costs for works and resale prices stay reasonable.
The Costa del Sol is reliant on the international market, so economic, political and social elements cannot be ignored. The abolition of inheritance tax has had a positive effect. Brexit initially had a negative effect on the numbers of British buyers but they are now beginning to come back. The long-term effects are still unknown, however. The region could also benefit from tax reform and more investment-friendly measures in the future, but overall the future for the Costa del Sol looks very sunny.
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