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Rarely does a day go by without a new study from a real estate portal providing fresh data on rising house prices, whether for sale or for rent. Without diminishing the value of these reports, it's important to keep in mind that they are prepared based on property listings that come onto the market, that is, with supply data, with the biases that this entails. Hence the interest in the IPVA (Spain's rental housing price index), an experimental statistic that the INE (Spain's national statistics institute) began publishing in 2022. This has now been updated with data for 2023, which are the most recent available to see how the rental market is really doing across Spain. The information used for its calculation comes from Spain's AEAT national tax agency, which collects the tax returns of taxpayers who earn income from renting housing for their regular use. This means that this price index is based on all current rentals in Spain (or, more accurately, in all of Spain except those few regions that have more autonomy) and not just on new contracts on the market. This, of course, assumes that all such rentals are declared to the tax authorities.
Based on this data, is Malaga city as affected by high rental prices as it seems to be? The answer is yes. Of all the Spanish provincial capitals, there is only one that exceeds it in the level of price rises suffered in the last decade: Valencia. The price of rented housing in Malaga city has risen by just over 26% since 2015, the year taken as a starting point by the INE to prepare this report. In other words, an apartment that in 2015 was worth 800 euros per month was already worth over 1,000 euros in 2023. For this same period the average increase at the national level was under 19%.
The 'Top 5' provincial capitals with the highest rents rises over the last eight years are dominated by Mediterranean cities: after Valencia and Malaga are Palma de Mallorca, Gerona and Castellón de la Plana, all of which have recorded rises of more than 20%. Next in the ranking, and also above the national average increase, are Guadalajara, Toledo, Santa Cruz de Tenerife, Murcia and Barcelona.
Focusing the analysis only on the last year with available data, which is 2023, Malaga is also the second provincial capital that suffered the highest increase after Valencia: 3.9%, compared to the national average increase rate of 2.6%. This rise is higher than in the previous two years, which is evidence of an acceleration in price rises.
The next cities with the highest rent increases are Gerona (3.5%), Alicante (3.4%), Palma de Mallorca (3.4%) and Castellón (3.3%). It is striking how these medium-sized coastal cities have replaced Madrid and Barcelona at the top of the rankings for rising house prices. This changeover has occurred after years of very intense price rises in the country's two main capitals and also as a result of the population growth experienced by peripheral cities since the end of the pandemic.
Within Malaga city, the district that leads the rise in rents is district 5 (Palma-Palmilla), with an accumulated 31% over the last eight years and a 5.2% increase in 2023 alone. It may come as a surprise that this area is the most expensive, but there is an explanation for this: starting from lower rents than in other districts and being affected by the general trend of rising rents throughout the city, its proportional increase has been greater than the rest.
This is followed by district 3 (Ciudad Jardín), up by 30.9%, district 9 (Campanillas) with 28.2%, district 8 (Churriana) with 26.9% and district 10 (Puerto de la Torre), up by 26.2%. At the other end of the scale, the district with the lowest increase over the last eight years is Teatinos-Universidad. It is the only one that remains below 20% (19.2%).
There are municipalities in Malaga province where the rise in rents has been even more intense than in Malaga city. This is the case with Alhaurín el Grande, Estepona and Coín, with accumulated increases since 2015 of 31.9%, 27.4% and 26.4% respectively. These percentages place them at the top of the ranking of the 750 Spanish municipalities with more than 10,000 inhabitants. In fact, Alhaurín is the third town in Spain (behind Ocaña and Riba-Roja de Turia) where the IPVA index has increased the most in the last eight years. Then, if we look at the rise over 2023, Coín has the fifth highest rental price increase in the whole country: 4.7%.
The municipalities of Benalmádena, Torremolinos, Rincón de la Victoria, Cártama, Álora, Mijas, Fuengirola and Vélez-Málaga have also accumulated rises of over 20% since 2015.
The INE study shows that the variation in rental prices is different depending on whether it is a new contract or an existing one. As such, Malaga is the second province in the whole country with the highest increase in 'old' contracts with 3.1%, only surpassed by 3.6% in Valencia. In the case of new contracts, they rose by 5.3% annually, which places it in third position in the ranking behind Valencia (6.5%) and Mallorca (5.7%).
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