West Costa del Sol property market

2024 Full Year

The Malaga & Costa del Sol housing market in 2024 presented a picture of upbeat stability, underpinned by steady sales, rising prices, and an increasing supply of new developments. However, activity in the mortgage market contracted, reflecting broader macroeconomic factors such as higher interest rates and tighter monetary policy. The following report explores the key market segments and trends.

Sales performance

Home sales in Malaga province (home to the west Costa del Sol) totalled 37,790 in 2024, representing a reasonable year-on-year increase of 7% (Fig. 1-1). This represented a 15% increase over the ten-year average and an overall increase of 46% over the last decade, highlighting sustained long-term growth in the market. It was the third-best year on record for home sales.

Foreign buyers

Foreign demand continues to be a crucial driver of housing demand in Malaga. There were 14,475 sales involving international buyers in 2024, up 5% from the previous year. This segment outperformed the ten-year average by 19% and has increased by 32% over the last ten years, reinforcing the province’s position as a leading destination for overseas purchases (Fig. 1-2).

• Of these, 3,963 were by foreign residents (expats), down 3% compared to the previous year but up 55% over the past decade.
• The remaining 10,512 purchases were made by foreign non-residents (FNRs), who typically buy second homes or investment properties. This group recorded an 8% year-on-year rise and a 25% increase over a ten-year period. FNRs are almost two thirds of the foreign market for homes on the Costa del Sol.

Despite a minor decline in overall market share, foreign buyers still accounted for 39% of all transactions (Fig. 1-3), slightly down from 40% a year ago. This indicates a relative increase in purchases by domestic buyers or a slowing pace of growth among foreign investors.  The Malaga province foreign market-share is one of the highest in Spain.

New build homes

Newly-built home sales saw robust performance with 5,360 units sold in 2024—an impressive year-on-year growth of 56%, and the second-highest sales figures seen in this segment for over a decade (Fig. 1-4). Compared to the ten-year average, new build sales rose by 116%, indicating a major surge in demand for modern housing stock in Malaga province, home to the Costa del Sol.

West Costa del Sol home sales

Looking just at home sales in the municipalities* of the west Costa del Sol, there were 20,736 sales—an 8% increase compared to the previous year and a 35% rise over a decade (Fig. 1-5). It was the second-best year on record and 15% higher than the ten-year average, which is a good benchmark for judging the year’s performance. 

House price trends

Home prices in Malaga province continued to increase in 2024. The average price of all homes sold reached €315,274, up 9% from the previous year (Fig. 2-1). Newly built homes averaged €378,604, marking a smaller annual gain of 3%.

Taking a longer view, price growth has been strong across both property types but significantly higher for new builds. The ten-year price index rose from 100 to 184 for all property types and to 197 for newly built dwellings (Fig. 2-2). This means:

• All property prices have nearly doubled over the last decade (up 84%).
• New build prices have increased by 97% over the same period.

Interestingly, over the last five years, price increases have been more pronounced in the resale segment than in the new build sector. Resale prices rose by 84% compared to just 22% for new properties. This shift may be due to the high base price of new builds in recent years or a narrowing value gap, with buyers increasingly willing to pay premium prices for well-located resales.

Marbella case study

According to figures from the Spanish property portal Idealista, the average asking price of property for sale in Marbella during the first half of 2024 was €4,803 per square metre, representing an annual increase of 13% (Fig. 2-3). Over the past five years, asking prices have risen by 68%, highlighting strong and sustained demand in the area.

Mortgage market

Mortgage activity in Malaga province softened in 2024 in response to higher borrowing costs and tighter monetary conditions. A total of 16,333 new mortgages were signed in the region, down 17% compared to the previous year (Fig. 3-1). Against the ten-year average, mortgages were down by 7%, while the long-run trend remains positive with a 34% increase in the last decade.

A key driver of the slowdown was the higher Euribor rate, which averaged 3.27% for the year (Fig. 3-2). Although this is slightly lower than the 2023 peak of 3.86%, it still represents a sharp increase from the negative rates seen in 2021 (as low as -0.49%).

The European Central Bank (ECB) began tightening monetary policy in 2022 in response to inflation pressures. With inflation now easing, financial markets expect the ECB to ease rates modestly in the near future, though borrowing costs are likely to remain elevated by historical standards through 2025.

Housing starts

Reflecting developer confidence and robust demand in the new build segment, planning approvals for new housing starts reached 9,349 in 2024 (Fig. 4-1). This is a significant 29% increase over the previous year and 55% above the ten-year average. Over the past decade, approvals have surged fourfold, demonstrating a major rebound in construction activity from post-crisis lows.

This growth aligns with rising demand for modern accommodation, including buyers prioritising energy efficiency, community amenities, and prime locations often found in new developments.

Summary

• Home sales in Malaga rose by 7% to nearly 38,000, with foreign buyers making up 39% of purchases.
• New build sales surged by 56%, boosted by rising demand and a strong pipeline of housing starts.
• Property prices continued upward, rising 9% overall, with new builds commanding a premium.
• Mortgage activity declined by 17% annually due to elevated interest rates.
• Euribor averaged 3.27%, down from the 2023 peak but still historically high.
• Housing starts increased by 29% annually and have grown fourfold in a decade.

Conclusion

The Malaga property market in 2024 remained buoyant, supported by ongoing foreign interest, strong demand for new builds, and long-term price growth. The recent decline in mortgage activity reflects the current interest rate environment, but moderating Euribor levels indicate some relief ahead for borrowers.

Looking forward, Malaga appears well-positioned for continued stability and moderate growth, especially if borrowing conditions ease and international demand remains strong. With new supply expanding to meet demand—particularly in the West Costa del Sol—the market will continue evolving, offering opportunities for both investors and end-users alike.

* The municipalities included in this analysis were as follows: Benahavís, Benalmádena, Casares, Estepona, Fuengirola, Manilva, Marbella, Mijas, and Torremolinos.

2024 H1

West Costa del Sol housing market: First Half of 2024

Sales performance

Total home sales: 18,565 properties were sold during the first half of 2024, reflecting a negligible year-on-year increase of 1% (Fig. 1-1). Compared to the ten-year average, this marks an increase of 14%, and over the decade, sales have risen by 46%.

Foreign buyers: Sales involving foreign buyers totalled 7,073, a year-on-year decrease of 2%. Compared to the ten-year average, this segment grew by 18%, with a decade-long increase of 36%. Among foreign buyers (Fig. 1-2):

• Expats living in Spain purchased 2,058 homes (down 6% YoY).
• Non-residents acquired 5,015 properties, primarily as second homes or investments (down 1% YoY).

Foreign buyer market share: Foreign buyers accounted for 38% of total sales, a slight decline from 39% in H1 2023 and well below the ten-year high of 42% (Fig. 1-3).

New-build sales: New-build transactions surged by 34% year-on-year, with 2,053 properties sold, reflecting robust growth of 14% compared to the ten-year average (Fig. 1-4).

Municipality-specific sales: Key municipalities in the West Costa del Sol collectively recorded 10,073 sales, an annual increase of 3% (Fig. 1-5). Over ten years, this figure has grown by 34%.

Pricing trends

Average prices: According to the Spanish Housing Ministry, the average price of homes sold in Malaga province reached €305,287, an annual increase of 10% (Fig. 2-1 & 2-2). New-build properties were priced higher at €431,949, reflecting a 27% rise year-on-year.

Ten-year index (Fig. 2-3):

• Overall property prices have risen from 100 in 2015 to 185 in 2024.
• New-build property prices have climbed more sharply, reaching 232.

This index signifies significant price growth over the decade.

Five-year changes: Prices for all properties have risen by 85%, while new-build prices have increased by 60%, indicating that existing homes are appreciating faster than new builds.

Marbella case study

According to Idealista, the average asking price of property for sale in Marbella during the first half of 2024 was €4,631 per square metre (Fig. 2-4), representing an annual increase of 12%. This robust year-on-year growth reflects strong demand for properties in Marbella, particularly in the luxury and second-home market segments.

Over the past five years, asking prices in Marbella have increased by 66%, indicating a sustained upward trend driven by the area’s appeal to high-net-worth individuals and international buyers. This level of growth suggests that Marbella remains one of the most desirable and competitive markets on the West Costa del Sol. The combination of premium location, quality amenities, and international demand continues to place upward pressure on property values.

Despite this growth, potential buyers should be aware of price sensitivity, particularly in light of rising mortgage costs, which could moderate future price increases. However, Marbella’s reputation as a high-end destination is likely to ensure ongoing resilience in its property market.

Municipal comparison: Marbella, Benahavís, and Estepona show different growth rates over ten years (asking prices):

• Marbella: Prices have more than doubled to 205.
• Benahavís: Index increased to 182.
• Estepona: Prices grew the most, reaching 224.

Mortgage market

New mortgages: A total of 9,034 new mortgages were signed in H1 2024, reflecting a decline of 11% year-on-year (Fig. 3-1). However, this represents a decade-long increase of 53%.

Euribor rate: The average Euribor rate stood at 3.67%, slightly below its 2023 high of 3.69% but significantly higher than the historic low of -0.49% in 2021 (Fig. 3-2). This reflects tighter monetary policy by the European Central Bank, which has maintained elevated rates to curb inflation, impacting borrowing costs.

Housing starts

Planning approvals: Housing starts totalled 4,870, a 26% year-on-year increase (Fig. 4-1). Over ten years, this figure has risen dramatically by 676%, although current levels remain below the 2019 pre-pandemic high of 5,580. The West Costa del Sol’s recovery from the pandemic has lagged compared to other regions.

Summary: Key takeaways

• Sales volume: Home sales remain strong, with growth driven by new builds and local buyers offsetting a slight decline in foreign purchases.
• Foreign buyer impact: Despite reduced market share, foreign buyers continue to play a crucial role, especially in the luxury segment.
• Price growth: Significant price appreciation across the region, with new builds showing particularly strong performance.
• Mortgage pressures: Higher borrowing costs due to elevated Euribor rates have tempered growth in the mortgage market.
• Construction activity: Housing starts are recovering but remain below pre-pandemic levels.

Conclusion

The West Costa del Sol housing market demonstrated resilience in the first half of 2024, marked by steady sales growth and robust price appreciation. However, the market faces challenges from higher mortgage rates and slower foreign buyer activity. Looking forward, strong demand for new builds and ongoing investment in luxury properties position the market for continued growth, albeit at a moderated pace.

* Municipalities of the West Costa del Sol included in the sales analysis for this report are: Benahavís, Benalmádena, Casares, Estepona, Fuengirola, Manilva, Marbella, Mijas, and Torremolinos.

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Disclaimer

These reports are prepared in good faith using publicly available data. While efforts are made to ensure accuracy, no guarantees are provided regarding the completeness, reliability, or suitability of the information for any purpose. Use of this information is at your own risk.

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