Property market on the Costa del Sol is the fastest growing in Spain

The coastal property market is even more complex than others. This is largely because it includes primary residences - people still live in seaside towns - and also holiday homes. Property appraisal company Tinsa has drawn up a report on how the performance of this specific market throughout Spain, concluding that the average price per square metre grew by 7.2% in the last 12 months, reaching an average of 1,848 euros. This includes both primary and holiday residences. In the case of second homes, the increase in price is almost five percentage points higher, 12.1%, bringing the average price to 2,970 euros per square metre. An initial analysis by Cristina Arias, director of research for Tinsa (now rebranded as Accumin): "This growth in holiday homes on the coast is higher than the 7.7% national rate and the 7.2% for general housing on the coast (excluding capital cities) and points to a greater concentration of new construction in the holiday market segment, consistent with the focus of developer activity in recent years, which has geared its product towards a demand with greater purchasing power that allows for covering higher production costs."

So, Malaga clearly stands out in this general context of rising prices as it is the Spanish province in which the coastal property market has risen the most, be they primary or second homes. The increase for Malaga is 14.3%, up to 2,612 euros per square metre. Pontevedra (11.2%, up to 1,709 euros) and Santa Cruz de Tenerife (10.8%, up to 1,876 euros) are next in line.

Nevertheless, in absolute terms, there is at least one other area that is more expensive than Malaga province: the Balearic Islands, where the average price per square metre is now 3,182 euros.

By municipalities, Malaga province has four of the 14 coastal municipalities where house prices have risen the most in the last 12 months, taking into account both first and second homes: Mijas (18.4%, up to 2,481 euros per square metre), Torremolinos (17.8%, up to 2,845 euros), Velez-Malaga (17.4%, up to 2,050 euros) and Estepona (17.4%, up to 2,577 euros).

Meanwhile, among the 15 most expensive across Spain, there is only one in Malaga: Marbella, with an average price of 3,262 euros per square metre.

Yet all these prices pale in comparison to the average values of strictly holiday homes on the coast. In this niche market, the most expensive by province are the Balearic Islands (6,650 euros per square metre), followed by Malaga (4,000 euros). These are followed by Vizcaya (3,700 euros), Girona (3,600 euros), Alicante (3,350 euros) and Cadiz and Las Palmas (both at an average of 3,200 euros per square metre).

Going into the details of Malaga as far as holiday homes are concerned, we find that the average price in the Axarquia region is 4,000 euros per square metre, 4,150 euros per square metre between Torremolinos and Mijas and 4,100 euros per square metre between Marbella and Manilva. This, according to Tinsa, contrasts with an overall average value of housing in the municipalities of the Malaga coast of 2,612 euros and an average value for the entire province of 2,442 euros.

Despite the strong rises recorded and the high price levels attained, the appraisal company's number-crunchers point out that the prices of second homes still have upward potential in 94% of these locations, including the coast of Malaga. These experts believe that only in specific locations in Tarragona, Ibiza, Formentera, Cadiz, Gran Canaria and Vizcaya are the prices close to reaching their peak "in the context of tourist overcrowding that is viewed as having saturated these markets", says Andrea de la Hoz, senior consultant at Tinsa-Accumin.

Another phenomenon, described by Cristina Arias, is also being observed: the prices of holiday and regular homes in an environment of interchangeable residential products. "The greater concentration of activity in the secondary home segment is generating a price squeeze on primary residences, with the supply becoming scarcer."

In terms of real estate activity, Malaga is the province in Spain with the second highest number of property sales in the last 12 months, standing at 24,004 and only behind Alicante with 31,751. This also represents a year-on-year increase of 6.3% on the Costa del Sol. The profile of buyers along the province's coast is predominantly international in all areas, with the exception of Fuengirola and surrounding areas of Malaga city, where there is a greater presence of Spanish buyers from Madrid and nearby provinces of Andalucía. Foreign buyers mainly come from the United Kingdom, Germany, Belgium, the Netherlands, Sweden, Ireland, Poland and the Middle East. Overall, foreign buyers account for between 60% and 70% of second home purchases.