Wider Malaga flats now cost almost as much as homes in the city

The Bank of Spain warns that, unlike in other cities where moving to the outskirts and surrounding towns reduces the financial burden, in Malaga homes outside the city cost almost as much as those within the municipality.

In Barcelona, for example, moving from the city to one of the surrounding towns reduces real estate prices by about 20%. The same is true in Madrid, Valencia and Seville, where the reduction would be 12%.

The same cannot be said for other cities like Zaragoza and Malaga, where the savings are barely 2.5%. This means that, if in the city of Malaga buying a home takes ten years, this barely drops down to 9.7 years in surrounding towns.

In Barcelona, it falls from 9 to 7.2 years. While Zaragoza is in the same position, with a very small change from 5.7 to 5.6 years, the financial effort that residents need to exert is much less.

If this is the case for the general population who do not own a home and who now want to buy their first one, the situation is even worse for young people living at home in Malaga. The years of net salary for a two-person household to afford a home range from 12.4 in the city centre to 11.8 in the surrounding areas. The Spanish average is 8.3 years.

Based on the Bank of Spain's data, the report concludes that Malaga is the city that demands the greatest effort from households among the six most populated cities in Spain.

According to the report, the reason behind this stark difference is the number of home purchases by foreigners.

The Bank of Spain says that while home purchases by non-residents have increased significantly in recent years, they remain relatively small across the country. These purchases are concentrated in tourist areas along the Mediterranean coast and the islands.

Between 2021 and 2025, they accounted for 7.4% of all home purchases nationwide, above the previous cycle peak in 2007, when they made up just 3.8%. In 2013, during a period of weak domestic demand, they rose as high as 11.5%.

In any case, these figures are far higher in Malaga: in 2025, purchases by non-residents accounted for 27.9% of the total, 13.6 percentage points higher than in 2007. Only Alicante has a higher share at 33.3%, followed by the Balearic Islands at 23%.

As a result, the report explains that difficulties in accessing home ownership push demand into the rental market, which in turn drives up rents. This particularly affects young people and migrants, and is most noticeable in central urban areas.

However, rising demand from people unable to buy is not the only factor pushing up rents. The Bank of Spain also highlights the growing impact of tourist housing in key urban and tourist centres.

"The rise of tourist housing is a phenomenon that increases pressure on housing demand and was not present during the housing boom of the 2000s." This issue is particularly acute in parts of Spain's Mediterranean coast and islands and within those areas, in specific neighbourhoods where it makes up a very large share of the rental market.

The report notes that these trends can be seen in the historic centres of Malaga and Seville, as well as in cities such as Barcelona and Madrid. According to Bank of Spain data, tourist rentals account for 28.9% of the rental market in Malaga's urban area, the highest among major Spanish cities. In the tourist centre of Malaga, they reach 44.6%, a level only slightly below Seville's historic centre at 44.9%.

Alongside this, the stock of homes owned by non-resident foreigners and those used for tourism together amounted to around 900,000 homes in 2025, equal to 3.3% of all housing in Spain. However, in some provinces this share is much higher. In Málaga it reaches 14.1%, second only to Alicante (14.5%), and well above the Balearic Islands (10.9%), Santa Cruz de Tenerife (9.1%) and Las Palmas (7.4%).

The Bank of Spain confirms that, while these homes used by non-residents do contribute to economic activity, their growing presence reduces the supply of homes available for permanent residence. It adds that in markets with strong residential demand and limited supply, both purchase and rental prices come under pressure from non-residential demand.

As a result, renting households in Malaga spend an average of 34.5% of their net income on housing costs, above the level considered excessive (30%). Malaga is therefore the Spanish city that requires the highest share of income among the six most populous cities, and above the national average (26.7%).

The Bank of Spain estimates that around half of renting households in Malaga spent more than 30% of their income on rent in 2024. Among young people who have not yet become independent but wish to rent, the figure would be 51.1%, compared with a Spanish average of 38%. The pressure is still increasing: new rental properties enter the market at an average premium of 14.5% compared with the average rent level.

On the supply side, the Bank of Spain highlights a cumulative housing shortfall, which it estimates at 750,000 homes. Around 52% of this deficit is concentrated in Madrid, Barcelona, Alicante, Valencia, Malaga and Murcia. In Malaga specifically, it points to low completion rates for planned housing: "According to the urban information system for 2025, only 35% of planned housing developments in Malaga have been completed."

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