The construction industry is thriving on the Costa del Sol, to the point that Malaga province has more building going on than anywhere else in Andalucía. A third of all the new development projects completed in Andalucía in the year from March 2018 were built in the province of Malaga, that is, 3,647 of a total of 10,609 new homes.
The good health of the real estate industry in Malaga province was confirmed in two reports revealed on Thursday last week: on one hand, the Visión 2019 study drawn up by Savills Aguirre Newman; and on the other, the Vivienda en Costa 2019 report prepared every year by the valuation firm Tinsa.
Both highlight sustained growth in the number of new properties built, as well as in property transactions, especially in Malaga city and along the Costa del Sol.
Visión 2019, which analyses the real estate market as a whole, points out that Malaga is way ahead of other provinces, such as Seville (where 2,258 new properties were completed during the 12-month period) and Granada (1,061).
This growing interest has had an affect on the evolution of property prices over the last few months. The Tinsa report revealed that average property prices have gone up most in Casares (+17.6%), Torremolinos (16.1%) and Mijas (15.3%).
Nevertheless the most expensive places to buy a property are still Marbella (2,331 euro/m2 on average), Nerja (2,095 euro/m2) and Fuengirola (1,907 euro/m2). In the case of the city of Malaga, prices have gone up by 14.9% in the last year reaching an average of 1,659 euros per square metre.
Tinsa's commercial director, Pedro Soria, said that the Costa del Sol is the driving force behind the recovery of the real estate market in Andalucía, a recovery that has been noted in every coastal town. He added, however, that there is still a long way to go to reach the top prices noted in 2007, just before the start of the financial crisis. On the entire Andalusian coastline the pre-crisis price peak has only been equalled in some parts of Tarifa.
Asked about the danger of a new real estate bubble, the specialist said that today's circumstances are different from those of 2007. Now mortgage providers are controlling credit much more and analyse the solvency of borrowers.
Soria added that the market is moving mainly by people selling their homes to buy a better one or buyers using their savings. "Now we have a healthier, more balanced and more sustainable model," he said.
With regard to the city of Malaga, where there is a surge in the construction of high-end properties, the expert said that there was a growing demand from buyers who would traditionally have bought in Marbella.
"Now clients are realising that [in Malaga] there are quality architects, an airport close-by and opportunities by the sea," he said.
Office space shortage
The city is in urgent need of 50,000 square metres of office space in order to meet existing demand, concludes the Visión 2019 report.
The director of Savills Aguirre Newman in Andalucía, José Félix Pérez Peña, said that all of the office buildings in the city are 96% occupied.