Costa del Sol dodges real estate slowdown due to high demand
The Costa del Sol continues to be an oasis for real estate transactions. This does not mean, of course, that it is immune to rising rates and the real estate slowdown. However, its special characteristics make it still an attractive and safe place for investment. Not for nothing, 50% of sales last year were to non-residents.both national and European.
Another distinguishing feature is that half of all transactions were cash transactionsThey have been able to save, invest or sell a previous property. For this reason, they have shown themselves to be oblivious to the rise in interest rates. In fact, this moderation in demand and the halt in the increase in prices "will be much less noticeable" on the coast of Málaga during 2023, stresses the CEO of Real State Business School, José Antonio Péreza study centre with a long history in the real estate sector.
Overall, Real State Business School estimates that the average price of housing in the Andalusian province will rise by 4.5% in the current year to an average of 344,577 euros. These values are higher on the Costa del Sol than in other Andalusian enclaves due to the higher average prices. A ticket that goes from half a million to 900,000 euros when it comes to high-end products, with the exception of luxury villas and flats that exceed one million euros. "On the Costa del Sol, other markets coexist, such as the high-end, with much higher averages even in mortgages," Pérez explains.
The first estimates agree that "the growing trend of demand on the Costa del Sol persists".
The Costa del Sol is divided into several areas, depending on the purchasing power of the buyer:
The classic golden triangle remains concentrated in the area between the west of Marbella, the south of Benahavís and the east of Estepona. It is here that the real luxury and top brand market extends, "dragging along other second and third brands in Real Estate, motoring, furniture, restaurants and a long etcetera".
According to the latest statistical report by Tinsa IMIE Local Markets, the province of Malaga was, together with the Balearic Islands, one of the two areas where the greatest effort was made to purchase a home in 2022. In fact, the Malaga rate reached 40.7 %. Even if the average household becomes more sensitive to high inflation and rising prices, Arias rules out a major change and advocates a "gradual slowdown", convinced that demand will be maintained and the supply of housing will be adjusted.
According to developers, consultants and real estate agents consulted by Real State Business School, the main investors in Costa del Sol products continue to be British, German, Scandinavian, Belgian and Arab. However, it is symptomatic and even ironic that in certain developments, real towers of Babel are emerging. The trends continue, anchored during the pandemic, which "demand free, private and open spaces, with large terraces together with energy efficiency, sustainability and respect for the environment".
Record fourth quarter
The latest housing report by Gesvalt, a consultancy firm specialising in real estate, places Malaga as the Spanish province with the highest increase in house prices during the last four months of 2022. This rise stood at 15.5 %, which gives an average price of 2,413 euros. However, Tinsa moderates this percentage increase and halves it to 7.6 1Q2022.
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