Model of the Torre del Río towers project, which is on display at SIMED. / SUR

Malaga sees huge growth in the sale of new homes overtaking Barcelona and taking second spot in Spain

A report reveals that the current pace of construction is not enough to satisfy the demand for new builds, which is putting pressure on the second-hand market

NURIA TRIGUERO MALAGA.

Malaga province has overtaken Barcelona as the area in Spain with the second highest number of new property transactions. Such is the dynamism of the real estate market on the Costa del Sol and Malaga city that so far this year, the province accounts for 10.6% of the national demand. It is only surpassed by Madrid, with 15.8%, while Barcelona, which used to occupy second place, is now in third place with 9.2%.

The figures are revealed in a report by the consultancy firm Colliers, which notes that Malaga's housing absorption rate is "spectacular", the highest in the country: 133.5%. This rate is calculated by comparing the number of new build transactions with the number of finished homes, so the fact that in Malaga it is greater than 100% means that more homes are bought than are finished. Or to put it another way: fewer homes are being built in Malaga than the market demands. Nationally, the absorption rate is 87.7%.

And the recently published Real Estate Pulsimeter report highlights that there are few developments underway in the province for the high demand, which is putting pressure on the second-hand market. The average price of a second-hand property in the province is 281,533 euros, which is higher than Barcelona (246,054), double that of Valencia (129,992) and more than 96,000 euros above the national average.

According to Colliers, the current financial year in Spain will close with more than 675,000 house sales. "The year 2022 started very strongly, with the first half of the year being the best in the entire historical series since 2007. More than 373,000 homes were sold, improving by 16.7% on the figures for the same period of the previous year," a Colliers spokesperson said. The new-build market also improved on the previous year's figures by 3.7%. New housing transactions reached a market share of 9.2%, slightly below last year (10.6%).

The end of the financial year is being faced with "less encouraging" forecasts, according to the consultancy firm. "There is currently a significant contraction in the second-hand market, as a result of the sharp increase in financial costs and the tightening of credit conditions".

In terms of foreign demand, the Colliers' report notes a "significant reactivation" during the first half of the year. Alicante continues to be the province most chosen by foreigners, accounting for 22.4% of foreign home purchases. Malaga, with a share of 13.5%, was the second most popular province for foreign buyers, followed by Barcelona (7.2%), Madrid (6.0%), the Canary Islands with their two provinces (9.3%), Valencia (5.9%) and the Balearic Islands (5.7%).