Welcome to the first of the Guide to Malaga report on the Malaga property market. In it, we take a snapshot of the situation in the city with the latest data available. Our report offers insight into prices for property in Malaga, the latest sales figures and what sort of return you can expect from buy-to-let. And we include highlights from recent reports on the market in the city.
Why a Malaga Property Report?
Malaga province has been a popular location for foreigners to buy property for decades. But homes in Malaga city are recent arrivals on the must-buy list. Since Guide to Malaga began back in September 2015, we have noticed an exponential rise in interest in the city’s property market.
Post lockdown it appears to be even higher- we’ve had more emails than ever asking for advice on where, what and how to buy. Interest is high among Northern Europeans keen to buy in Malaga. And then, there are the British buyers anxious to get residency in the city before Brexit at the end of December.
We’ve compiled this report in response to this demand for information. And as always, if you need any more, get in touch.
Property prices in Malaga
Figures for changes in property prices in Spain always tag behind in time so many are often at least 3 months old. In this Malaga Property Report we quote the latest available.
In Q1 2020, the average price per m² in Malaga was €1,723. This is -0.27% down on Q4 2019, but up 4.9% on Q1 2019 (Ministerio de Transportes, Movilidad y Agenda Urbana; figures based on valuations).
Online property portals also report on changes in Malaga property prices. These are based on asking prices on the platform. In August, Idealista found that the average price in Malaga was €2,115 per m², a rise of 3.5% in the year. The graph below shows price trends since October 2006. In August, prices were 3.4% below their historic high (April 2007).
Biggest price hikes
The areas with the highest price rises were the Centre (up 5%), Carretera de Cadiz (up 2.5%) and East (up 1.9%). The Centre also had the most expensive property with the square metre price at €2,817.
Colliers International reported in July that prices for resale property in the city centre stood at €2,820 per m², down 9% in the year. Properties in the east cost on average €3,430 per m², down 2% in 12 months.
In a report published in July, Savills found that prices for multi-family properties in Malaga (i.e. apartments and flats) rose by 18% in the year to reach an average of €2,425 per m².
Property sales in Malaga
The latest statistics for Malaga province (Q2 2020) from the Registrars Association are as follows:
- 25,310 sales in year to Q2, the fifth highest number in Spain.
- In Q2, 867 new-build properties were sold.
- Foreigners accounted for 27.14% of all purchases (third highest in Spain) with a majority of British buyers.
Rental returns in Malaga
In its quarterly statistics (figures for Q2 2020), Idealista reported that rental return for buy-to-let properties in Malaga was 5.8%. This is higher than both Madrid (5.3%) and Barcelona (4.8%), but lower than the average for Spain (8.2%).
In common with many Spanish cities, Malaga has seen long-term rental rates drop slightly since March. And there’s now more supply. Much of the influx of new properties on the market comes from holiday lets whose owners have decided to let long term instead. Great news for those looking to rent accommodation in Malaga. Will it result in better returns though?
Where’s the property market in Malaga going?
In the current covid-19 scenario, predicting anything economic is a challenge. General consensus is that the property market throughout Spain is in for a quiet autumn. Sales are unlikely to pick up until well into 2021, although prices don’t seem to be freefalling as some analysts expected when Spain went into lockdown in mid-March.
For the Malaga market specifically, we have sourced the following information.
- “Malaga has solid bases that will help it recover rapidly after the covid-19 crisis: high levels of market liquidity, investor appetite and financial capacity.” Savills, September 2020.
- In early September, Habitat International invested over €33 million in the purchase of land in Finca El Pato (western seafront).
- In late August, Larvia, the property arm of Warren Buffett’s Berkshire Hathaway, bought a property agency in Marbella and renamed it Berkshire Hathaway HomeServices Marbella. We know this isn’t Malaga, but it does give you an idea of the interest in the potential of the local market in 2020.
Should you buy in Malaga now?
Again, we don’t have a crystal ball and the covid-19 situation is volatile. Prices have, on paper, varied little and investors waiting for a flurry of bargain properties have so far been disappointed.
“Changes in property prices in Malaga will depend on how quickly the owner wants to sell.” Colliers International (July 2020)
Much, as always, will depend on your personal circumstances. British buyers wishing to become resident in Malaga to benefit from the withdrawal agreement before 31 December this year may be in more of a rush. Other buyers may want to take advantage of rocket-bottom mortgage interest rates and strong competition among banks for your money.
Whatever your reason and your timeline, one thing’s for sure – Malaga is a great place to live whether you buy or rent!
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