Talking about real es on the Costa del Sol is synonymous with reactivation, new construction and luxury. Both the city of Malaga and the coast have experienced a continuous and growing demand for housing since 2015. The impulse of foreign tourists, who are looking to spend longer and longer periods in Spain, and the boom of tourist flats as a short and medium term investment have contributed greatly to this. This demand, in turn, has resulted in very intense price increases, which in some cases have reached the levels recorded before the crisis. However, experts say there are still real estate investing opportunities in this market.
“The Costa del Sol is a benchmark for the coastal market and specifically, Malaga is the spearhead as a reference for the investor because it is a location that has all the services: AVE, airport, seaport, cultural and gastronomic offer … meets all the requirements for Spaniards and foreigners to enjoy their old age in this town,” says Jesus Gil, CEO of the luxury real estate brokerage agency, Gilmar.
With these characteristics, the Costa del Sol has again become a point of reference for the investor, there are currently three types: the institutional, the small investor and the domestic, who buys a home as a savings.
Despite the boom that this market has experienced “currently there is a very attractive picture, mainly because of the capital gains obtained by those who bought after the crisis at very low prices,” explains Ivan Rodriguez, CEO of iKasa, who says that there are still three or four years of upward journey.
Second, the expert highlights the residential rental component, as much of the foreign demand first rents and then buys. And finally for tourism rental, “where profitability can reach 10 or 12% and has as much interest as rent in the main capitals of Madrid and Barcelona,” says Rodriguez.
In this sense, Alvaro Marcos, manager of promotions of Aedas Homes, believes that this is one of the great attractions for real estate investing in this market, because “the new market on the coast offers customers the opportunity to rent their second home, perfectly combining the enjoyment of it with a good investment and is a figure that we are finding a lot in Aedas Homes.”
The British continue to lead the purchase of property, but also highlight customers in Sweden, Belgium, Germany and France.
The coast has been, according to experts, the first market that began to recover after the crisis by the foreign buyer. “It is a market where the international client is predominant, increasingly more stable and of more diversified origin. Although the British continue to lead, customers from Sweden, Belgium, Germany and France stand out. It is a destination that covers the desires and needs of these customers, who are looking for good weather, beaches, golf courses, good infrastructure and services. This has revitalised this market and it has grown in double digits,” says Ignacio Peinado, territorial director of Eastern Andalusia Neinor Homes.
The strong demand has caused price tensions in some specific points, such as the case of the “triangle Marbella, Estepona and Benahavis, where there is currently nothing less than 300,000 euros, as the average price ranges from this base to half a million euros, along with multi-family homes that are for sale for one million euros,” says Susana de la Riva, director of marketing and communication of Tinsa, who stresses that “only in more degraded areas you can find some supply of flats for 120,000 euros.
The expert specified that “the coast of Mijas, Fuengirola and Estepona are the most dynamic cores in front of Benalmádena and Torremolinos, where new construction is more contained and prices, after the change in trend registered in 2016, have stabilised.
The great challenge facing the Costa del Sol is to provide greater legal certainty to investors and developers.
Estepona is the most dynamic market in real estate development on the Costa del Sol, as it combines a strategic location with all the services tourists are looking for, with an agile administration that determines certainty about its projects. In addition, in the city there are two clear markets, residential and projects aimed at the international public.
On the other hand, Álvaro Marcos, from Aedas Homes, points out that the great challenge facing the Costa del Sol is to provide greater legal security for real estate investing for investors and developers. “The administrations have to give legal certainty and certainty in the deadlines for the processes of land development, otherwise the promoters can not do their work, because the buyer is unsure if the planning is going to be cancelled or stopped.