Average price of new-build homes in Malaga rockets

The average price of new homes sold in Malaga this year is almost at 340,000 euros, new figures show.

Much new construction is no longer a purchase option for middle and working class people looking for housing in the province. Newly built homes that have been constructed since the pandemic are focused on buyers with high purchasing power, according to latest data in the Real Estate Pulsimeter of Malaga, Andalucía and Spain, prepared by Real Estate Business School (REBS).

There are many well-known examples such as the skyscrapers in Martiricos (with homes costing up to 600,000 euros), the buildings in Torre del Río (where apartments have been sold off-plan at three million euros), the small and exclusive developments that dot the Limonar area and the luxury residential tourism developments in Marbella or Estepona.

This trend is also backed up in real estate transaction figures, with the average price of new homes sold in the province this year close to 340,000 euros. Buyers must fork out at least 110,000 euros more than five years ago - on average - to buy a new house in Malaga.

The price difference between the first and second-hand market has widened as a result, with a new home in Malaga costing, on average, 66,877 euros more than a second-hand home in the province. In percentage terms, the extra cost paid by buyers of a new construction is 25% compared to those of used housing.

Affordable housing is increasingly scarce

While prime real estate market is flourishing, affordable housing is increasingly scarce in the used housing market. Former dean of the College of Architects, Francisco Sarabia, said: "As all the high-end supply is sold, the developer does not see the need to look for business in another market where profits are lower".

The housing market "can be divided into three demand groups: high-end, groups at risk of exclusion and, finally, the large housing consumer sector, which is the middle and working class - This is the group that cannot find housing, the architect added.

Booming market

The high-end housing market is booming in Malaga, despite a slowdown that the real estate market as a whole is showing. Housing sales have fallen by 13% so far this year in the province and one of the main reasons is that, as a result of the rise in the Euribor, fewer and more expensive mortgages are being granted. But for luxury homes, most buyers do not need to get into debt to buy a property.

"This year we expect that of every two sales, only one will be with a mortgage. However, the trend of stable sales continues, thanks to the increase in cash transactions due to the savings accumulated during the years of the pandemic and the sale of inherited homes, which accelerates reinvestment. In the case of luxury, it is almost always paid in cash," said José Antonio Pérez, director of REBS.