Malaga | Torremolinos | Fuengirola | Marbella | Estepona
Costa del Sol, Spain
Property Mark
et
overview 2022
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COSTA DEL SOL
WHERE TO INVEST
ON THE COSTA DEL
SOL IN 2022
As Spain moved out of the Covid-19 economic slump in 2021, real
estate on the Costa del Sol entered its busiest year since 2008.
Despite travel restrictions, in place for most of the world until the
summer and not completely lifted for British tourists until early 2022,
the Costa del Sol saw buoyant sales and consistent price rises
throughout 2021.
According to the Property Registrars Q4 2021 Report, sales went up by
42.2% in the year, making it the fifth busiest area for Spanish property.
Prices saw a year-on-year increase of 6% with new builds
experiencing a 13.6% hike as this section continued to drive the
market. For their part, Benahavis and Marbella posted the first and
third most expensive property prices in Spain.
Property Market 2022
OVERVIEW
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Population growth continues with a younger profile among new
residents. Over 65% are aged between 16 to 64 and as a result, the
Costa del Sol continues to see an increase in new businesses.
The number of new companies created in 2021 reached 5,816, the third
highest in Spain and up 37% on 2020. Malaga is expected to see GDP
growth of 6.3% this year, well ahead of the regional and national
averages (5,5% and 5.4%, respectively).
As well as a top relocation destination in Europe, the Costa del Sol is a
firm favourite for second homes. It’s therefore a honeypot for property
investment, but where best to put your money? In this article, we take
five of the largest urban areas on the Costa del Sol and put them under
the microscope for property investment.
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MALAGA
THE CAPITAL OF THE
COSTA DEL SOL
Malaga is a vibrant welcoming city with excellent
communications, at both domestic and international level. It
has a diverse economy, one of the best cultural offerings in
southern Spain and a thriving real estate sector.
Economy and local employment
The sixth largest city in Spain, Malaga has the highest economic
activity in Andalusia. Key sectors are IT and telecommunications,
based in the PTA technological park with over 20,000 employees and
640 companies. Vodafone opened its European R&D Centre in the
city early this year with an investment of €225 million. Tourism and
services are also major players.
Culture and education
Known as ‘The City of Museums’ (Malaga has over 30 including
several prime art museums), Malaga stands out as a cultural hub in
southern Spain.
Property Market 2022
MALAGA
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As
well as art collections by Picasso and from the Pompidou Centre in
Paris and Russian State Museum in St Petersburg, Malaga boasts a
Philharmonic Orchestra and hosts numerous renowned cultural events
including the Malaga Film Festival and Jazz Festival.
Construction and Real Estate
The capital of the Costa del Sol is currently the focal point of new-build
construction with several major projects underway. They include prime real
estate at Malaga Towers and La Térmica development on the western
seafront plus two high-rise blocks (residential and hotel) in the
Martiricos district.
According to the OMAU, the average square metre in Malaga in December
2021 cost €3,388, a figure that is now ahead 6.2% of the peak price in
December 2007. Sales in the city accounted for just over 22% of
transactions on the Costa del Sol.
Rental yields in Malaga (figures from Fragua by Atlas Real Estate)
currently stand at 7.22%, higher than both Barcelona and Madrid.
Rental rates have increased by 40% over the last two years and in
December, the average rent per square metre stood at €14.
Tourism
Malaga closed 2021 with visitor figures well ahead of those for 2020
(up 83.9%) and the number of Spanish tourists was higher than prior
to the pandemic. However, international visitors were still behind 2019
levels when the city was one of the most visited destinations in the
country. However, with the lifting of travel restrictions in early 2022,
predictions are optimistic.
Property Market 2022
MALAGA
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ESTEPONA
THE GARDEN OF THE
COSTA DEL SOL
At the west end of the Costa del Sol (92km from Malaga and 48km
from Gibraltar), Estepona has become a rising star in the area
particularly in new infrastructure and real estate development. The
town has seen a multi-million-euro renovation and now offers one of
the most attractive centres on the coast. Known as ‘The Garden of the
Costa del Sol’ because of its thousands of plants and shrubs,
Estepona ranks as a highly sought-after holiday spot and place to live.
Economy and local employment
Construction in both real estate and infrastructure has increased
considerably in Estepona, creating employment and improving
communications and amenities. Tourism and services form the
backbone of the town’s economy although agriculture and fishing
remain important staples.
Property Market 2022
ESTEPONA
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Construction and Real Estate
The town council has focused on streamlining building licences and as
a result, Estepona has seen considerable new residential development
over the last five years. In December 2021, average prices stood at
€2,712 per square metre, just 5.5% below their peak 14 years earlier
and up 1.14% in the year. Sales went up by 38.1% in Q3 last year.
Analysts tip Estepona as one of the investment hotspots on the Costa
del Sol because the town is still at growth stage. The ease of obtaining
planning permission compared to next-door Marbella represents an
advantage for developers, both Spanish and foreign. As a result, it
continues to attract international investment.
In January 2022, annual rental yield stood at 4.2% and the average
price per square metre at €10, up 7.2% in a year.
Tourism
An increasingly popular holiday destination, Estepona has seen
regular increases in visitor figures over the last five years. Although the
pandemic reduced activity to minimal levels, tourism gradually gained
ground during 2021 and the resort expects a strong return in 2022.
Property Market 2022
ESTEPONA
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TORREMOLINOS
THE BIRTHPLACE OF
MASS TOURISM
The place where mass tourism took off on the Costa del Sol in the
1960s, Torremolinos is one of Spain’s top holiday destinations. It’s also
one of the few resorts on the Costa del Sol to enjoy almost full
occupancy all year round. Torremolinos also benefits from its proximity
to Malaga (just 25km away), making it a popular place to live among
commuters.
Economy and local employment
Almost entirely dependent on tourism, the local economy has suffered
considerably since the outbreak of the pandemic. However, plans
continue for the construction of a giant shopping and leisure centre on
the outskirts of the town with investment to the tune of €850 million.
Property Market 2022
TORREMOLINOS
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Construction and Real Estate
Analysts rank Torremolinos among the best places on the Costa del
Sol for potential expansion in property. It certainly has seen one of the
highest growths since 2019 – in December 2021, the average square
metre price stood at €2,971, just slightly over the peak prices
registered in December 2007.
After a slow 2020, sales picked up in 2021 and increased by 39.5%.
Annual rental yield is around 5%. In January 2022, the average price
per square metre was €10.70, the second highest after Marbella and
up 8.4% in a year.
Tourism
With the fourth highest hotel capacity in Spain and a tourist resort par
excellence, Torremolinos has suffered the effects of the pandemic more
than most resorts on the Costa del Sol. However, visitors levels have
started to recover and 2022 shows every sign of being a busy year.
FUENGIROLA
THE 2
nd
HOME OF THE
SCANDIS IN SPAIN
The smallest town in the province, Fuengirola benefits from proximity
to Malaga (36km away) and excellent communications with the rest of
the Costa del Sol. One of the busiest resorts in the summer,
Fuengirola also has a well-established foreign population and is
especially popular with Scandinavian residents.
Economy and local employment
Services particularly retail and leisure activities and tourism make up
the lion’s share of the economy in Fuengirola. With the exception of
real estate, few other sectors make any significant contribution to local
employment.
Construction and Real Estate
Fuengirola is one of the most developed areas of the Costa del Sol
with little room for new construction.
Property Market 2022
FUENGIROLA
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As a result, most real estate activity is in the resale market. The
average price per square metre stood at €2,482 in December 2021,
up 0.91% in the year. Current prices are 6.9% below their 2007 peak.
Sales soared in the year to Q3 2021 when they rose by 56.6%.
Rental yields were 4.1% in 2021 and the average square metre price
for rentals in January 2022 was €9.70. This represents a 7.7% rise over
the year, confirming Fuengirola’s popularity as a favourite with tenants
on the Costa del Sol.
Tourism
Fuengirola also suffered from a dramatic drop in visitor figures since
the outbreak of the pandemic, although the town’s popularity among
Spanish tourists helped boost numbers in the first half of 2021.
Snowbirds from Scandinavia have also sustained tourism, albeit far
from the levels seen in winter 2019. However, as a perennial favourite,
particularly with families, Fuengirola should see tourism bounce back
in 2022.
MARBELLA
THE JEWEL OF THE
COSTA DEL SOL
The jewel in the Costa del Sol’s crown and one of Europe’s prime
tourist destinations, Marbella needs no introduction. Among its
attractions are a renowned micro-climate (considered one of the best in
Europe), three marinas including the world-famous Puerto Banús,
some of the best golf courses in Spain and excellent communications.
60km to the west of Malaga, Marbella is the second largest town on
the Costa del Sol after Malaga and has seen its population grow by
almost 42% in the last 20 years.
Economy and local employment
Like the rest of the Costa del Sol, the economy in Marbella centres on
tourism and services, although with luxury as the differentiating factor.
The resort is home to Spain’s third largest luxury sector after Madrid
and Barcelona. With 100% reach in 5G and fibre optics, the town has
also positioned itself as a digital ecosystem to attract international
investment in technology and innovation.
Property Market 2022
MARBELLA
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Construction and Real Estate
The real estate sector in Marbella currently enjoys a consolidated
position. Property prices are always the highest on the Costa del Sol
and in December last year, stood at €4,471 per square metre.
This is a 9.53% increase in the year and 34.9% more than their peak in
December 2007. The resort has returned to international investors’
radar and saw an uptick of 51.9% in sales in the year to Q3 2021.
Rental yields stood at 4.7% in December 2021 when rates per square
metre averaged at €12.30, the highest on the Costa del Sol. Marbella
also registered one of the highest increases in rental rates in 2021
(+12.1%).
Tourism
Marbella experienced an unusually quiet year for tourism during the
first half of 2021, although international visitors began to trickle back
in the second half of the year. Expectation is high for 2022.
Property Market 2022
MARBELLA
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LINKS
Registrars Association
https://www.registradores.org/documents/33383/148207/
ERI_4T_2021.pdf/2a890601-5e11-a825-c13f-18fb3dde2e85?
t=1644832032898
INE company creation
https://www.ine.es/daco/daco42/daco424/sm1221.pdf
GDP predictions
https://www.laopiniondemalaga.es/malaga/2022/01/20/economia-
previsiones-malaga-crecera-2022-mejor-andalucia-61750501.html
https://www.thepropertyagent.es
RESEARCH SOURCES
Property Market 2021
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OMAU
https://static.omau-malaga.com/omau/subidas/archivos/2/0/8602/
mercado-inmobiliario-de-malaga-cuarto-trimestre-2021-%282%29.pdf
Fragua
by Atlas Real Estate
https://www.eleconomista.es/vivienda/noticias/11590371/01/22/Malaga-
adelanta-a-Madrid-y-Barcelona-en-la-rentabilidad-del-alquiler-por-la-
llegada-de-nomadas-digitales.html
Malaga tourism
https://www.fomento.gob.es/be2/?nivel=2&orden=34000000
Sales stats up to Q3 2021
https://sevilla.abc.es/andalucia/malaga/sevi-malaga-consiguio-mas-
pernoctaciones-turistas-nacionales-2021-antes-
pandemia-202201271929_noticia.html
THANK YOU.
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