Improvements to Costa homes surge during pandemic but big-build projects stall

One of the projects in Malaga that resumed after the pandemic.
One of the projects in Malaga that resumed after the pandemic. / Salvador Salas
  • Town halls in Malaga province are optimistic about demand for their building licences in 2021 but want to simplify red tape for home owners

With less than a month to go before the first anniversary of the state of alarm coming into force in Spain, the picture of what has happened in Malaga province, in terms of construction, seems clear.

Although the sector has not plummeted there has been a slowing down of major projects, although this has been compensated by an increase in smaller ones. Modernisations and improvement works have saved many small building firms, because as soon as the lockdown was lifted they received numerous requests for quotes from private home owners.

By area, Malaga city and the Costa del Sol have seen the highest amount of investment for development projects, although not as many as before the pandemic or on a smaller scale. One of the most notable cases is Mijas, which since 2019 has topped the list of works licences granted in the province. These are worth 787 million euros, practically double those of Malaga city.

Mijas and Marbella

Andrés Ruiz, the Town Planning councillor for Mijas, says the 2019 figures were as high as they were because several large developments were being built at the same time, mostly in the area of La Cala and La Cala Golf. This is why the figure was so much higher than in 2018, which had been a year in which investments in the municipality only totalled around 400 million euros.

In 2020, after a difficult year because of the pandemic and especially the lockdown, Mijas council granted works licences with a value of 143 million euros.

"This year we will be back to around 200 million again," he says.

The most positive case was Marbella, where between 2019 and 2020 there was a considerable increase in the value of works licences. For Kika Caracuel, the Town Planning councillor, Marbella has "withstood" the very harsh economic crisis brought by the pandemic.

"These figures are also supported by the latest employment data. There has been an increase in unemployment in all sectors, just like the rest of the provinces and the whole of Spain, apart from construction, where employment has increased. In other words, at the moment this sector is maintaining economic activity in Marbella," says Caracuel. "Marbella is doing well and continues to be seen as an attractive place to live, to buy a property." She also says the municipality is continuing to receive applications for large-scale projects.

Fuengirola increase

Elsewhere on the Costa del Sol, construction has slowed down with the exception of Fuengirola, where the value of building projects has risen from 84 to 92 million euros. Estepona, Torremolinos and Benalmádena have not provided any specific figures about overall investment in their areas, although the mayor of Benalmádena, Víctor Navas, said a few days ago that in 2019 the town hall had processed 2,887 applications, while in 2020 there had been a decrease of 55 per cent and a reduction in income of one million euros.

On the eastern coast the situation is very similar. The mayor of Torrox, Óscar Medina, said that although investment in building projects fell in 2020, he is very optimistic that this year and the next few years will be better, as there are some major projects pending such as the Calaceite marina, with a golf course and more than 3,000 homes, and in other areas such as El Morche and El Peñoncillo.

Improvements to Costa homes surge during pandemic but big-build projects stall

"We have major possibilities in terms of urban growth and I hope that when all this is over the sector will quickly reactivate," he says.

Vélez-Málaga and Nerja did not provide any information about the construction sector in their municipalities, but Rincón de la Victoria's Town Planning councillor, Miguel Ángel Jiménez, confirmed that licences for minor building works fell between March and June last year because of the lockdown.

"From July onwards we granted a similar number of licences to usual. This was also thanks to the fact that we facilitated the process, and people were able to go ahead with projects which had been impossible during the lockdown," he explains.

He continued, "Although comparing the effects of the pandemic on investment in general in the private construction sector, you can clearly see a drop of nearly six million euros, mainly due to the lack of large projects. In 2019 there were more applications for apartment complexes than there were in 2020."

Improvement works

Inland, there were also fewer applications for major projects and more for small ones last year. Sources in Alhaurín de la Torre say the number of licences granted to build residential property has increased overall since 2015, after an enormous drop during the financial crisis. However, 228 licences were issued for this purpose in 2019, while last year the number fell to 77. There was very little change in the number of applications for improvement works.

In Cártama the mayor, Jorge Gallardo, said the number of licences for minor works had risen considerably in comparison with those for major projects. In his opinion, though, and Town Planning councillors such as Andrés Ruiz in Mijas agree, this is because many councils have introduced a system where people can just sign a declaration of responsibility for small projects, instead of having to wait for applications to be granted.

In Malaga city, where the reduction in investment has fallen around 30m euros to 395m there was a notable increase in small building projects.

Activity here fell by 35 per cent in March last year and 75 per cent in April, but only ten per cent in May, and in June there was a reactivation in the sector and an eight per cent increase in business compared with the same month in 2019. These figures are from Andimac, the National Association of Distributors of Ceramic and Construction Materials. In a study this association showed that the cost of a complete reform of a property is around 5,700 to 5,400 euros, and this can be nearly 49 per cent of the total cost, without taking IVA into account.

Most of the projects Andimac studied had been able to proceed on the basis of a declaration of responsibility, a tool which the association considers vital for the sector in a particularly difficult year.