Costa Tropical housing market report – H1 2025

This report provides a data-driven overview of the property market in the Costa Tropical region of Granada province, with a focus on key municipalities such as Almuñécar, Salobreña, and Motril. Based on official data sources, it covers sales, prices, mortgage lending, and construction activity in the first half of 2025. These insights help local and international market participants understand recent performance and long-term trends.

Sales performance

There were 8,264 home sales in Granada province during the first half of 2025 (Fig. 1‑1), representing a modest year-on-year increase of 7%. Compared to the ten-year average, this was a rise of 40%, and over the decade, sales volumes have more than doubled, up by 123%.

Foreign demand continues to contribute meaningfully to the market. There were 879 purchases by foreign buyers in the period, up 2% year-on-year. This segment has grown 37% compared to the ten-year average and 109% over the last decade. By residency status (Fig. 1‑2):

  • 576 homes were bought by foreigners living in Spain (expats), up 5% year-on-year
  • 303 homes were bought by foreign non-residents (FNRs), down 4% year-on-year 

Over ten years, expat purchases have increased by 155%, while FNR purchases are up 55%. Despite this growth, the market share of foreign buyers slipped slightly to 10.9%, down from 11.5% in the same period last year (Fig. 1‑3).

Sales of new-build homes surged to 549 transactions, up 43% year-on-year (Fig. 1‑4). This marks a 76% increase compared to the ten-year average and 81% over the decade, highlighting a strong rebound in development activity.

Zooming in on the Costa Tropical, there were 1,105 home sales in the municipalities of Almuñécar, Salobreña, and Motril (Fig. 1‑5). This represents a 1% increase year-on-year, 14% above the ten-year average, and 63% higher than a decade ago—indicating steady, long-term growth in this coastal submarket.

Prices

According to the Housing Ministry, the average price of homes sold in Granada province during H1 2025 was €139,037 (Fig. 2‑1), up 7% year-on-year. The average price of new-build property stood at €191,622, marking a 15% increase over the same period.

Over the past ten years, resale prices have risen by 22% overall, whereas new-build prices have surged by 66% (Fig. 2‑2). This widening gap reflects strong demand and inflationary pressures in the new-home segment, likely driven by construction costs, land scarcity, and renewed developer activity.

In the Costa Tropical municipality of Almuñécar, asking prices have also climbed significantly. From €1,554/m² in 2015 to €2,798/m² in 2025, this represents a ten-year increase of 80% and a five-year gain of 42% (Fig. 2‑3). This robust appreciation confirms the area’s growing appeal, particularly among international buyers seeking coastal properties outside the more saturated Costa del Sol.

Mortgage lending

Granada province recorded 4,800 new mortgages in the first half of 2025 (Fig. 3‑1), an increase of 20% compared to the same period last year. Lending volumes were also 36% higher than the ten-year average and up 112% over the decade—demonstrating an active credit market supporting transactions.

The average Euribor rate during the period was 2.27% (Fig. 3‑2), down from the recent peak of 3.69% in 2023 and well above the historical low of -0.49% in 2021. This decline suggests a shift in monetary policy direction, as the European Central Bank signalled the end of its tightening cycle. Market expectations now point toward potential rate cuts in the second half of 2025, which could ease mortgage costs further and support demand.

Construction activity

There were 1,034 housing starts in Granada province during H1 2025 (Fig. 4‑1), up 30% year-on-year. Compared to the ten-year average, this was a 50% increase, and over the decade, new housing starts have grown by nearly 350%. This sharp rise in planning approvals indicates growing confidence among developers, likely encouraged by strong sales of new homes and rising prices.

Outlook

The Costa Tropical continues to attract steady demand, especially in its coastal municipalities. While foreign buyer share has dipped slightly, absolute numbers remain solid, and the new-build segment is gaining momentum. With moderating interest rates, strong price growth in key towns like Almuñécar, and a recovery in construction, the outlook for H2 2025 remains positive, though continued monitoring of FNR demand and global economic headwinds will be important for assessing future trends.

Previous reports

The Costa Tropical property market in 2024 experienced moderate but consistent growth, supported by stable buyer demand, rising prices, and a healthy level of new development. Overall sales volumes increased slightly year-on-year, with continued engagement from both domestic and foreign buyers, although the market share of international purchasers edged down. Prices remained on an upward trajectory, especially in consolidated areas such as Almuñécar, while mortgage activity and housing starts maintained positive trends. This report provides a comprehensive overview of the Costa Tropical housing market in 2024, covering key metrics including sales performance, property prices, mortgage lending, and construction activity.

Sales performance

In 2024, the Costa Tropical housing market reported a total of 15,461 home sales, a marginal year-on-year increase of 13% compared to 2023 (Fig. 1-1). This figure was also 29% higher when compared with the ten-year average. Over the past decade, total sales have increased by a notable 96%, suggesting sustained long-term growth in housing demand.

Foreign buyers accounted for 1,704 transactions, representing a year-on-year increase of 8%. This group continues to play a significant role in the regional market, although its overall presence has softened. Of these international buyers in 2024, 1,115 were foreign residents (expats) living in Spain, while 589 were foreign non-residents (FNRs) acquiring second homes or investment properties (Fig. 1-2).

Purchase activity among expats grew by 9% year-on-year, while that of FNRs rose by 7%. Despite this growth in transaction volume, the share of foreign purchases dropped slightly from 11.8% in 2023 to 11.3% in 2024 (Fig. 1-3). Over the last ten years, purchases by foreign buyers have grown by 89%.

New-build home transactions declined to 783 units, an 8% drop compared to the previous year (Fig. 1-4). However, this still marked a small increase of 11% over the ten-year average, with modest overall growth of 11% since 2014.

Within Costa Tropical municipalities specifically, 2,075 home sales were registered in 2024, a small increase of 4% year-on-year and 11% above the ten-year average (Fig. 1-5). This confirms continued demand specific to this submarket of the wider Granada coastal region.

During 2024, the average sale price of residential property in the province of Granada reached €129,653 (Fig. 2-1), reflecting a 6% annual increase. In comparison, newly-built properties averaged €151,682, which represented a 20% decline year-on-year — a shift which may reflect rebalancing demand, incentives, or pressure on developers.

Over the past ten years, a comprehensive index tracking property prices in the area has risen from 100 to 132.4 for all properties and to 144.2 for new properties (Fig. 2-2).

This means that new-build property prices have appreciated 44% since 2014 — significantly outpacing the 32% gain in general property prices. This differential could stem from improved energy efficiency standards, modern amenities, and premium locations associated with new developments.

Analysing the shorter-term trend, property prices have risen by 32% over five years, versus 18% for new builds — further underlining the relative deceleration in the new-build segment after a period of strong gains.

Almuñécar case study

In Almuñécar, one of Costa Tropical’s key municipalities, the average asking price in 2024 stood at €2,452 per square metre, a rise of 14% year-on-year (Fig. 2-3). Over the last five years, asking prices have increased by 33%. According to the ten-year index of asking prices, the market has risen from a base of 100 to 143.7, illustrating a 44% gain in vendors’ pricing expectations over the decade.

Mortgage market

A total of 7,491 new mortgages were issued in Granada province during 2024, reflecting a 3% increase year-on-year (Fig. 3-1). This figure is 8% higher than the ten-year average and represents a 56% rise in mortgage activity over the decade, indicating long-term confidence in real estate financing.

The average Euribor rate — the key benchmark for most variable-rate Spanish mortgages — stood at 3.27% in 2024 (Fig. 3-2).

This was slightly lower than the preceding year, with a 15% decrease year-on-year, down from 3.86% in 2023. The Euribor had previously reached its lowest rate of -0.49% in 2021. The current level, while high relative to the past decade, suggests a stabilisation following recent European Central Bank (ECB) tightening. Markets anticipate that the ECB may begin easing rates if inflation moderates, which could provide support for both lending activity and housing affordability in 2025.

Housing starts

The number of new housing starts in 2024, measured by planning approvals, totalled 2,017 units across Granada province (Fig. 4-1). This was a 6% increase on the previous year and a substantial 47% over the ten-year average. Importantly, new starts have increased by 168% over the past decade, indicating strong long-term growth in residential development. This reflects both population expansion and investor confidence in the region.

Summary

  • Total home sales rose by 13% year-on-year, reaching 15,461 transactions.
  • Foreign buyers accounted for 11.3% of activity, with slight declines in market share despite growth in absolute terms.
  • Prices rose by 6% overall, while new-build prices declined by 20% year-on-year.
  • Mortgage activity increased by 3%, supported by a slight drop in Euribor from recent highs.
  • New housing starts expanded by 6%, with long-term construction growth exceeding 160% over ten years.

Conclusion

The Costa Tropical housing market showed resilience and moderate growth in 2024 against a backdrop of higher borrowing costs and softening foreign demand. While overall transaction volumes and local buyer activity remain healthy, a slight cooling in new-build pricing and foreign market share could suggest a rebalancing in the market. Mid-term trends point to sustained development and increasing domestic demand, while the outlook for 2025 will depend significantly on interest rate policy and wider economic confidence within the eurozone.