There is a high volume of new homes in the province. / SUR

New properties in Malaga province are now 135,000 euros more expensive than six years ago

Luxury residential developments on the Costa del Sol affect the figures for the province as a whole

SUR MALAGA.

There was a time when conversations in the lift, the waiting room at the health centre or over Christmas dinner with the in-laws, was about the weather, football and the love life of celebrities as reported in the gossip press. Those conversations do still take place, but the main topic nowadays seems to be the price of property in Malaga. Nor does that seem likely to change in the near future: buying a new property in the province nowadays is 135,000 euros more expensive than it was six years ago.

That is one of the most striking figures from the latest report from the Real Estate Business School, which has just been officially presented in Malaga city.

"One of the study's main conclusions refers to Malaga's position in Andalucía and in Spain," says CEO José Antonio Pérez, who then goes on to put into context the increase of 135,436 euros in the average price of new homes compared with that of 2016.

"It has to do with the volume of new homes there are in this area. You have to take into account the high-end developments in La Zagaleta, for example, and elsewhere on the Costa del Sol, because those affect the statistics for the province as a whole," he explains.

This most recent report from REBS also shows how the price of resale properties has risen at a similar rate to new homes in the past six years, by about 70 per cent.

"If there were more new properties, the resale market would not be as strong and there would be less tension," Pérez says. But despite this he says the property market in Malaga is "healthy".

Mortgage-free

Pérez also gives several examples. The first is that almost half of property purchasers in Malaga do not need a mortgage. In fact, the report says that although prices are continuing to rise, the average amount of a mortgage in Malaga has only increased by 0.79 per cent in the past six years and is still below 180,000 euros.

"This is creating an obvious adjustment between what is available and what is wanted in the Malaga property market. New developments are being sold as fast as they are built," Pérez says.

He sees no sign of a forthcoming crisis in the sector like the one of 2008. "There is no economic crisis as there was then, or anything like it. The market is quite healthy because what is on offer matches the demand. Practically no-one is holding off to see what might happen," he says.

And with regard to the shortage of new builds affecting the price of resale homes in the province: "This is something we saw when they were building Teatinos and developing other areas of Malaga city. If new apartments in Colinas del Limonar, for example, are on sale for 400,000 euros the owner of a property in El Mayorazgo is going to put their price up," he explains, and he reiterates that new developments play an important role in reducing the tension with the resale market.

In fact, the Real Estate Business School report includes figures which suggest that the property market in Malaga is cooling down. A look at how prices have evolved in recent years shows, for example, that the price of new apartments in the city rose by 11.05 per cent in 2021 compared with the previous year, but this year the increase has been 4.43 per cent and is expected to be 4.54 per cent next year.

A changing trend

The change in the resale market is even more marked, because whereas at the end of last year prices had increased by 17.96 per cent, this year the margin will be around 12.38 per cent and next year it is likely to be just 5.01 per cent.

"There are signs of an adjustment taking place in 2023," Pérez agrees. He doesn't foresee the market coming to a halt altogether, "as long as unemployment does not rise sharply and people do not default on their loan repayments because of rising interest rates and the cost of living due to inflation," he says.

"The adjustment we are seeing is natural, because of the uncertainty. People see how their income is decreasing, and so they prefer to be cautious," he explains.

So the property market is still healthy and the adjustments are no cause for concern. However, it looks as though house prices will still be the main topic of conversation for some time yet to come.

is the rise in the cost of new-build apartments in Malaga this year, and the forecast for next year is 4.54%. This figure is in sharp contrast to the 11.05% increase in 2021, and is evidence of a cooling-down of the property market in the province.

Amount of the average mortgage

Price of resale property

Price of brand new housing

Prices in euros (2022: forecast, 2023: estimation)