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 Q3 2020, the average price per m² in Malaga was €1,764.80. This is 1.4% up on Q2 2020 and 2.4% higher than Q3 last year (Ministerio de Transportes, Movilidad y Agenda Urbana; figures based on valuations and latest available). Tinsa (Spain’s largest valuation company whose data is based on valuations) reports that prices fell by 3.6% in the year to Q3 in Malaga city. They averaged €1,598 per m² and stood at 33.8% below their peak in Q2 2008. Online property portals also report on changes in Malaga property prices. These are based on asking prices on the platform. In November, Idealista found that the average price in Malaga was €2,099 per m², a rise of 3% in the year, but slightly down on October (-0.5%)
Biggest price hikes
The areas with the highest price rises were East (up 5.3%), Carretera de Cadiz (up 3.8%) and Centre (up 3.2%) in the year to November. The Centre had the most expensive property with the square metre price at €2,809.
Property sales in Malaga
The latest statistics for Malaga province (Q3 2020) from the Registrars Association are as follows:
- 24,285 sales in year to Q3, down 19.07% on the same period in 2019.
- In Q3, 1,658 new-build properties were sold.
- Foreigners accounted for 30.25% of all purchases (third highest in Spain) with a majority of British buyers.
Rental returns in Malaga
In its quarterly statistics (figures for Q3 2020), Idealista reported that rental return for buy-to-let properties in Malaga was 5.6%. This is higher than both Madrid (5.2%) and Barcelona (4.7%), but lower than the average for Spain (7.9%). According to the Colliers Residential Report published in November, rental returns in Malaga vary between 4% and 4.75% in the Centre and East. You can expect slightly higher (5.35% to 6.75%) in all other districts in the city.
In common with many Spanish cities, Malaga has seen the supply of long-term rentals rise sharply. According to Idealista, the number of available lets went up by 26.2% in Malaga city over the summer. Great news for those looking to rent accommodation in Malaga. Will it result in better returns though? Rental rates remain more or less stable and in November, the average rent per square metre was €9.90. This figure is 4.5% lower than November 2020.
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.
In late November, Colliers International said they expected to see prices for new-build property in Malaga to go up by the end of this year compared to 2019. On the other hand, they forecast a 5% to 15% drop in resale house prices in the city.
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
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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