Holiday rental property map of the Costa del Sol: numbers continue to grow across Malaga province, except in the city

The Costa del Sol continues to see a monthly increase this half-year in the number of holiday rental properties registered with Andalucía's RTA tourism register. Only the provincial capital of Malaga has put the brakes on this, following city hall's approval of the most drastic measures taken in the province. These measures began by limiting them to properties with independent access and eventually went on to ban them in 43 districts where this type of accommodation represents 8% of the total residential stock. These restrictions are reflected in the RTA's statistics, which show that, from 29 January to 25 June, Malaga city had 571 fewer tourist homes and 2,754 fewer places to accommodate tourists. In total, there are currently 12,781 holiday rental properties operating in the city, totalling 66,238 beds.

This situation contrasts sharply when analysing the data at provincial level. During these same six months, 4,594 properties across the province have opened their doors to accommodate tourists, offering over 25,000 beds. Following this continuous upturn, the Costa del Sol and its inland municipalities are now close to 86,000 tourist properties with capacity to accommodate 455,171 visitors.

This increase in the province at a rate of 5.6% overall is driven by the increases experienced in the main coastal municipalities. In contrast, looking at a list made up 27, almost all inland towns, the supply of this type of accommodation has remained stable during this period.

Quite the opposite has happened in Marbella, where the growth of holiday rental properties seems to have accelerated, with 1,038 properties registered in these six months, just as the peak months for tourism begin. This means that the destination has nearly 6,200 more vacancies in villas and apartments dedicated to tourists, bringing the total to 88,310, which in turn means that this type of accommodation option accounts for over 20% of the market.

To a lesser extent, but also with a strong increase, is Estepona, adding 806 tourist properties with more than 4,500 beds to its portfolio. This municipality now has 7,574 tourist apartments with 41,682 beds. A rapid increase in this type of accommodation is also evident in Mijas, where the supply has increased by 713 holiday homes with 4,037 beds in the last six months, reaching a total of 9,782.

This type of holiday accommodation continues to grow more moderately in Benalmádena and Torremolinos, with increases of over 450 properties apiece. Fuengirola stands out, with only six more properties registered in the same period, totalling 6,161.

Despite this steady growth, there has been a slowdown in the rate of increase to the supply in the holiday rental sector. It should also be noted that the regional government estimates that 30% of properties are registered as tourist properties even though they are not operating as such. All that glitters is not gold. Furthermore, the weaknesses of an activity that, years ago, seemed like a panacea are growing and such activity is now beginning to generate disenchantment. Tourism industry experts warn that tax pressures, rising energy and labour costs and upcoming regulatory developments, including the entry into force of the 'Registro Único' (Spain's new, national tourism registry), as well as being on standby 24/7 to meet any client needs, are some of the factors that are beginning to tip the balance in favour of an alternative business model to holiday rentals.

Data from the Junta de Andalucía indicates that the number of tourist properties deregistered last year across the region skyrocketed to 2,825 properties at the owner's request and 2,514 ex officio (by order of an official authority), adding up to 5,339 cancelled licences. Also that, in February 2024, the Junta approved a new decree to regulate tourist housing. This decree, in addition to raising the requirements that properties must meet, also gave them a one-year deadline to adapt the properties, a process with which some of them have been unable to comply.

Behind this data are stories that provide answers as to why owners are choosing to abandon holiday rentals to embark on new developments with their properties. The circumstances are numerous, some as simple as having registered their properties to avoid future restrictions and now, faced with new pressures to pay special rubbish disposal fees or higher fees if part of a residents' association, they have decided to come off the tourism register. This is not the case for Carlos, a young man who, after several years of working, took the step of buying his first home. Faced with that cost, he decided to start renting out holiday homes to pay for it with the income earned.

However, things did not turn out the way he thought they would, and not really because of a lack of bookings. "As a business it was going very well, but it is a sector that requires full dedication 24/7 and, when it's not your main job, it's complicated." He explains that, if you give it to a property services management company, the expenses skyrocket because you also have to hire cleaning staff. "It's not easy, especially when, having become completely demonised, new regulatory requirements, higher tax pressure and more fees get added. Experiencing it from the inside has little to do with the myth that tourist homes are money-making machines," he says. So, at the end of last year, he decided to deregister and start a new venture in long-term rentals, "a new adventure" to achieve the goal of reducing the high mortgage burden faced by young people who take the big step of becoming independent. "At least now I'll enjoy tax advantages and a stable income as long as, as is the case right now, the tenant continues to pay without fail," he says, noting that demand is very high, as are rents.

Julio also left the holiday rental business last year. In this case, because adapting the property to the Junta's latest regulations was the final straw for a business that had been floundering since the pandemic. "Costs are increasing and so are the requirements. There comes a time when, if you're in this business to supplement your retirement, the numbers just don't add up," he says, commenting that, after much consideration, he decided to sell up, taking advantage of the surge in high prices and strong demand. These are the two sides of the coin in the holiday rental sector, whose demonisation generates disillusionment in some and new opportunities for others.