Tuesday, 24 October 2023, 08:27
House prices are starting to drop in Malaga after two years of steady increases, new data shows.
The cost of housing soared after the Covid-19 pandemic as foreign buyers joined those locally in search of a home in a province blessed with good climate and increasing opportunities for work. It's pushed those living here out of the most sought-after areas such as Malaga city and the main towns along the coast.
But the latest market analysis carried out by the asset valuation company Gesvalt points to a downward trend in prices, showing a decrease of 3.8% in average house sales in the province over the past three months.
The average price per square metre has fallen from 2,446 to 2,352 euros. It is the first decrease registered in the past two years, since the third quarter of 2021, according to the data.
In Malaga city, the average price of housing for sale, both new and previously-owned, currently stands at 2,291 euros per square metre, which shows a stabilisation, having risen by just 1.8% in the past three months, a lower increase than in the previous quarter of this year (2.3% rise).
Are we facing a slowdown in the price of property for sale in Malaga?
General secretary of the Association of Builders and Developers (ACP) Violeta Aragón is not surprised by the data as prices "cannot be rising forever". She pointed out that the rise in interest rates has led to a reduction in the signing of mortgages, which has affected housing transactions. As previously reported by SUR, the sale and purchase of homes has fallen in Malaga three times more than in Spain during the first seven months of the year, with a drop of 16% compared to the same period in 2022.
But ACP said it does not believe this is the start of a downward trend in prices. "We must not forget that prices are also governed by costs, including land, and today a lot of new construction is still being sold and nobody is stopping new projects, as the local buyer has been joined by those who come from abroad and those who do not even need a mortgage to pay for their homes," Aragón said.
Regional director of Andalucía and Extremadura of Gesvalt, Gregorio Abril, said the recent decrease in the price of property for sale in Malaga corresponds to a "period of adjustment in which the supply of moderately priced homes is very scarce both in Malaga city and in the coastal area". "Malaga, together with Madrid, continues to be at the head of the most expensive housing prices in Spain," Abril said, who also pointed out that he does not expect a sharp drop in prices in the coming months because "demand continues to be far ahead of supply, both in new and second-hand housing".
With new housing, there may be "quarterly ups and downs: upwards when developments with moderate prices are delivered, and downwards when there are no homes at these lower prices, leaving homes on the market that are not very affordable for the majority of buyers," Abril added.
José Antonio Pérez, professor at Real Estate Business School, also does not predict a sharp decline in the price of homes. "On average and generally throughout Spain and in Malaga, more marked by the tourist, cultural, student, gastronomic and digital nomadic talent attraction, it will continue to grow moderately," Pérez said.
Rental prices will continue to rise, both at a provincial level and across Malaga city and the main coastal cities, according to the Gesvalt report. On average, the monthly cost per square metre now stands at 13.70 euros in the province, an increase of 2.8% quarter-on-quarter and 12.9% year-on-year.
In Malaga city, the cost of rent reaches 14.25 euros per square metre (17% more than a year ago), the highest of all Andalusian capitals, followed only by Seville, with 11.5 euros per month per square metre.
The wave of stabilisation or fall in housing prices also affects Marbella. the town has accumulated two consecutive price falls so far this year. In the last quarter, the average price of homes for sale in Marbella was 3,190 euros per square metre, which is 2.5% less than three months ago. Compared to the data for the first quarter of 2023, this drop is 4.5%.
The municipalities of the coastal strip of Malaga also recorded decreases in the price of housing for sale in recent months. Benalmádena went from 2,367 euros per square metre three months ago to 2,326; Estepona, from 2,127 euros per square metre to 2,103; Fuengirola, from 2,190 to 2,163; Mijas, from 2,252 to 2,143; Torremolinos, from 2,174 to 2,111; and Vélez-Málaga, from 1,336 to 1,297.
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