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Ever upwards and no sign of slowing down. This is how prices for rented properties in Malaga continue to rise according to the most recent report by property appraisal company Gesvalt for the second quarter of this year. Both in Malaga city and in the main towns around the province the rise in rents continues unabated and they now exceed on average for the province 15 euros per square metre per month. Particularly significant is the case of Malaga city, where the rate of rental growth has doubled thus far this year. Thus, if in the first quarter of the year they increased by 2.4% to reach an average cost of 14.41 euros per square metre per month, in the second quarter of this year they have increased by 5.2%, reaching a figure of 15.16 euros per square metre per month.
On average at the provincial level, rents are 15.09 euros per square metre, which represents an increase of 13.3% compared to prices one year ago. This percentage increase has remained unchanged in Gesvalt's quarterly statistics since the middle of last year. In the second quarter of this year, the increase in three months was 5.4%, two percentage points higher than in the first quarter. Compared to two years ago, the cumulative increase is 37%.
In the main towns across the province, those with more than 50,000 inhabitants, there are some startling cases of rent rises so far this year. The case of Estepona really stands out where, in the first half of 2024, rents have risen by 16% to 15.85 euros per square metre. Estepona is, however, not alone - also significant is the 12% increase in Torremolinos (15.87 euros per month per square metre), a municipality that shows the growth in demand for rental properties by people who have been unable to afford Malaga prices and so have sought rentals in nearby towns. However, rents in Torremolinos are now higher than those in Malaga city.
As for Marbella, so far this year rents have risen by 8% to almost 20 euros per square metre per month. This is the same percentage rise for Vélez-Málaga, although it still remains the town in Malaga province with the lowest rents (7.38 euros/m2).
This upward trend in property prices is not spared by property sales being any different as these too are on the increase, albeit less markedly. On average, the price per square metre for a freehold in the province has risen to 2,489 euros, 2% more than a year ago. In the case of Malaga city, the price per square metre is 2,491 euros, which represents a year-on-year increase of 11%, and a 5% increase in the last three months.
In the larger provincial towns, flats for sale have risen by an average of 5% so far this year. Most noticeable are the prices in Marbella where they have risen by almost 4% in the first half of the year, with a square metre at 3,293 euros.
For Gregorio Abril, regional director for Andalucía and Extremadura at Gesvalt, the disproportionate rise in rents in Malaga is due to three factors. "Firstly, residential tourism has grown to a great extent, reaching record occupancy. Secondly, the new Housing Law and the legal uncertainty have taken many properties previously dedicated to long-term rentals off the market. This has led to a standstill in rentable supply in areas of high demand and the creation of greater concern about tenants defaulting, among other consequences," he stated.
Finally, according to Abril, rental prices have also been affected by the paralysis occurring for residential building projects intended for meeting this type of housing demand, mostly due to this "legal uncertainty", which "is reducing the supply of new rental properties on the market."
As for the increase in the price of homes for sale, the head of Gesvalt attributes this to the "shortage of new housing supply due to the financing difficulties being encountered by developers of land that is tagged for development." He also pointed to "the increase in residential tourism, the increase in investors competing to acquire properties at a higher profitability [flippers], and the high demand in Malaga, which is making homes that could previously have been considered affordable more expensive" as other causes.
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