Market reality puts a stop to most exorbitant prices being asked for rental apartments in Malaga and on the Costa

The rise in rents in Malaga and on the Costa del Sol over the last few years has been so steep that seeing a price flash up in red immediately catches the eye. Yet this is what can now be seen in the statistics produced by the property portal Idealista: for the first time in the last 12 months there was a monthly drop in August in the average price of flats offered on this company's website: 1.2% at a provincial level and 0.2% in Malaga city. Let's get this straight, it is not that rents are now falling in Malaga, but that the average price of the properties advertised has fallen - and only by a little.

So what does this data mean? Well, a reality that can be observed by visiting any real estate portal: there are properties that have dropped in price in Malaga. However, this is not the general market trend. These are properties that had been sold at totally exorbitant prices and their owners are now forced to 'bajarse del burro' (get off their donkey) as the Spanish would say ('get off their high horse' in English), and accept a lower price after months without securing a tenant.

On Idealista, as of yesterday, of the 1,400 properties offered for rent in Malaga city, there are 114 that have been reduced in price. Of these, 33 have a discount of more than 10%. The most obvious example is in Martiricos towers where last February, when both buildings were officially opened for business, a flat rental advertised at 4,500 euros per month went viral. Among the rents that have fallen the most in price on Idealista are several located at those towers. These twin blocks are now gaining a reputation due to the problems of coexistence between residents and tourists staying in a considerable number of tourist apartments there. Some examples: a one-bedroomed flat of 50 square metres that was advertised at 2,300 euros is now at 1,500, another of the same size that was at 1,600 is now at 1,250 and a three-bedroomed flat that was at 3,900 euros is now at 3,000. In other words, yes, they have gone down, but they are still not at market price.

There are other cases on Idealista that stand out for their exorbitant prices, giving us some idea of how deluded some property owners in the city have become about what rental prices they could achieve. A 42m2 ground floor flat in Miraflores de los Ángeles (one of many premises converted into flats) was offered until recently for 1,650 euros per month. The owner has come to their senses and is now asking 1,000 euros, although he warns that the contract will be for a shorter term and in the summer months the price will change to the original amount of 1,650 euros.

The list goes on: a price drop of 500 euros, (or 20%) for a penthouse in Calle Bolivia in Pedregalejo district (from 2,500 euros to 2,000 euros). It has one bedroom and is 60 square metres. There is also a 20% discount on a 32m2 flat in El Ejido district that was priced at 1,000 euros and has now been reduced to 800.

In other municipalities along the Costa del Sol there are also examples of heavily discounted flats, although many of them have a catch: they are short-term rentals. We found several examples that have been halved in price: a flat in Manilva that was priced at 1,500 euros per month and is now on offer at 750 (but is only available from October to December); another in Benajarafe that goes from 1,800 to 900 euros (but only available between February and July 2025) and another in Rincón de la Victoria which goes from 1,800 to 900 (from September to June).

Inmaculada Vegas, partner at real estate agency Rentacasa, which specialises in rentals, warned that rental prices in Malaga "are not going down and will not go down as long as the supply, which is very small, does not increase." The figures prove her right as Malaga has the smallest rental housing stock of all the major Spanish cities.

Vegas admitted that there are owners who arrive "with the idea that if my neighbour puts the flat at 1,500 euros, I'll put it at 2,000 because mine is nicer." "That's what we professionals are there for: to bring them down to earth and explain to them what the market prices truly are. I always advise them not to waste time setting exorbitant prices in case our luck runs dry, because the time they are not renting it is money they are losing," she explained. "What's more, my advice is that, if the average price is 1,000 euros, you should set it at 950: it's better to charge a little less and have a good tenant."

Idealista shares the view that rental prices show no signs of bottoming out soon in Malaga. "The data that we handle seem to indicate that this monthly decline observed in August is more about the usual behaviour of the market than the beginning of a series of falls. The province of Malaga has a very strong demand for housing and only a very high increase in the stock of rental housing in a short period of time could cause significant falls in prices," said Francisco Iñareta, spokesperson for this portal.