Malaga has firmly established itself as Spain's new luxury property capital, boasting the highest percentage of premium properties, accounting for 30% of the country's homes priced over 2.5 million euros. This remarkable figure sets it apart from other renowned destinations like Mallorca, Madrid, and Barcelona, which contribute 27%, 9%, and 7% respectively to the prime property market. According to the latest report from Lucas Fox, the luxury segment now comprises 10% of Malaga's total real estate offerings, which include prestigious residential complexes such as Be Grand Limonar, La Térmica Beach, and Malaga Towers.
With the sale of apartments reaching nearly 3 million euros at the opulent Malaga Towers development, the city cements its status as the go-to locale for high-end real estate globally. Lucas Fox's Director for Malaga, Rodolfo Núñez, highlighted this upward trend: "The luxury segment is growing, especially in Malaga, due to its exceptional conditions and its strong appeal to international clients seeking unique experiences and an exclusive lifestyle." This statement reflects the high demand stemming from international buyers seeking investments, with 57% of high-net-worth individuals purchasing luxury properties as second homes.
The Costa del Sol’s temperate climate, vibrant cultural scene, and gastronomy continue to attract foreign interest, yet the region faces challenges with limited new builds, which has led to increased property prices soaring by approximately 5% during the first half of 2024. This scarcity raises concerns for future growth, as new constructions are expected to accommodate rising demand. "It is important to boost new construction to meet demand and continue supporting local economic growth. This will also help strengthen Spain’s international brand," Núñez emphasized.
Analysts note another fascinating aspect of Malaga's real estate market: the growing number of foreign investors. Around 32.35% of property transactions—and only surpassed nationally by Alicante and the Balearic Islands—involve foreign buyers. Malaga’s allure lies not only in its diverse living options but also its lifestyle offerings, which strongly resonate with buyers from the European Union and North America.
For example, the Malaga Towers development showcases three high-rise buildings with exclusive amenities including panoramic views, fitness centers, and expansive coworking areas. The project, which cost 150 million euros, has already generated significant traction, with specific apartments priced above 3.5 million euros, highlighting unprecedented interest.
Despite Malaga's leading position, its overall real estate ranking falls behind other provinces when considering total transactions. With 35,211 properties sold last year, the province stands fifth nationally, significantly trailing leaders like Madrid and Barcelona. Notably, Malaga ranks third concerning new property sales, with 10,777 new homes sold, marking a staggering increase of 63.2% year-on-year.
Delving beyond the numbers, the distinction between new versus used properties reveals underlying market shifts. While new home sales soared, second-hand property transactions decreased by almost 11% last year, amounting to 24,434. This disparity positions Malaga at the forefront of new builds amid stagnant demand for older properties as buyers gravitate toward fresh, modern developments.
The city itself accounts for around 18.95% of transactions within the province, reflecting its significance compared to smaller municipalities like Cordoba and Cadiz. More residents opt for the charm of newly developed properties, which are perceived as reliable investments for both personal use and investment returns.
Moving forward, the future of Malaga’s real estate market looks promising, though contingent upon addressing the issue of limited new construction. The region is uniquely positioned as the preferred location for affluent investors seeking luxury homes and short-term rentals. Entrepreneurs and professionals from Northern Europe increasingly flock to the area, attracted by its optimal living conditions.
Malaga, recognized for its luxurious offerings and high standards, is set to retain its title as Spain's luxury real estate hub as long as construction can meet increasing demands. While challenges remain, the potential for growth presents exciting opportunities for investors and developers willing to navigate this dynamic market.