Malaga: a top-ranked player in Spain’s luxury real estate
PinIt’s a trend that won’t surprise people who live in and around Malaga, or who have visited the area lately. The city is becoming a magnet for foreign investments in premium housing.
Malaga, the capital of the Costa del Sol, the sun-bathed stretch of picturesque coastal towns in the south of Spain, has emerged as one of the country’s most sought-after destinations for investors in luxury real estate.
The Summit: focus on premium real estate
This is one of the conclusions reached by the Premium Real Estate Summit held in Madrid in late November 2023.
According to event participants, Málaga — along with such “classic” locations as Mallorca, Madrid and Barcelona — is undergoing a wide range of transformations to improve the quality of life, upgrade neighborhoods and create “unique environments.” Combined with an array of other factors, from great weather and fabulous beaches to rich historical heritage and its role as a modern transportation hub, Malaga is expected to attract extraordinary levels of investment in real estate.
Grupo Tecnitasa, one of the participants and sponsors of the Summit, described Madrid and Málaga as the two “fashion capitals” that were positioning themselves very strongly within the national market.
In recent years, Malaga has made many positive changes in a number of important areas – from urban planning and leisure to gastronomy and culture – which has prompted foreign investors to acquire properties within the new urban projects that are being developed in the capital. “With more than 8,000 transactions per year, the province of Malaga is currently the main pole of attraction for luxury in the country,” notes Grupo Tecnitasa.
The latest research by Caixa Bank provides data to support that conclusion. Compared to other provinces, Malaga was behind only Madrid, an undisputed leader, in the overall percentage of sales exceeding €1 million. Accounting for 15.4% of real estate transactions over one million euros, Malaga was ahead of the Balearic Islands (13.4%), Barcelona (11.9%) and Alicante (3.4%).
What drives demand for Spain’s luxury real estate?
There is a broad agreement among experts that luxury housing in Spain occupies a special – and thriving – place in the residential market. It’s also the one that is particularly attractive to foreign investors. In fact, notes Grupo Tecnitasa, “Spain ranks as the fourth luxury destination in the world and the main European power for investments.”
And why is that? Certainly, the predominantly moderate and hospitable climate plays a role, and so does the natural beauty and diversity of the country. Beyond that, however, the most frequently cited factors include overall safety and security, quality of healthcare, excellent communications and transportation services and newly expanded options for remote work. Add to that the high standard of living with a vibrant cultural scene, numerous sports and entertainment options and the popularity of the Mediterranean cuisine.
A great insight into the motivations of foreign buyers as they weigh the advantages of the Spanish real estate market was offered by one of the speakers at the Summit Bruno Rabassa, the CEO of Berkshire Hathaway HomeServices. When people with high purchasing power come and consider buying a property in Spain, he pointed out, “what they want is to be able to live as Spaniards do, to be able to reconcile work and leisure, to be able to walk safely, issues that for us are something very commonplace.”
Price is also a significant factor, according to Luis Díaz, director of the luxury area of Grupo Tecnitasa, who took part in the debate on trends in the evolution of luxury developments. He stressed that if one were to make a comparison with such cities as Miami or London, prices even in the most expensive locations in Spain were much more affordable.
Who’s buying where…
In terms of the percentage of total sales exceeding €1 million, Malaga Province recorded nearly three times the national average, coming in third after such “classic” luxury destinations as the Balearic Islands and Madrid. At the same time, Malaga Province was behind only Madrid, an undisputed leader, in the overall percentage of sales exceeding €1M. At 15.4%, Malaga was ahead of the Balearic Islands (13.4%), Barcelona (11.9%) and Alicante (3.4%). These findings confirm earlier research that showed Malaga’s prominent position in the luxury market.
While the increase in interest rates had somewhat dampened the demand for housing in Spain, one of the factors that helped to cushion the effect was the purchasing activity by foreigners. In the third quarter of 2023, international buyers accounted for 15.4% of the number of housing transactions in Spain, amounting to almost 90,000 sales over the last four quarters, according to Caixa Bank Research.
Broken down by nationality, the most active buyers of Spanish real estate hailed from three countries — Germany (13.2%), the United Kingdom (12.8%) and France (10%), reflecting a slight realignment compared to the previous quarter. They were closely followed by the nationals of Belgium (9.7%) and the Netherlands (8.2%), with the percentage of buyers from Sweden, Italy and Ireland ranging from 4.8 to 3.1%. Meanwhile, buyers from the United States still lagged behind at 2.4%, just ahead of Norway (2.1%) and Switzerland (1.1%).