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As vaccine programmes advance and international travel returns to the agenda, what does this mean for real estate on the Costa del Sol? According to a recent report, the changes in the health situation and return of foreign visitors means a quick reactivation of the Costa del Sol property market, particularly in Q3 and Q4 this year.
Vision Malaga 2021, the latest annual look at the market paints an optimistic short-term scenario for real estate in the city and nearby Costa del Sol. Based on buoyant land and new-build markets, Savills Aguirre Newman expects a dynamic rest of the year.
Dynamic land market
The report points out that although the general context in 2020 was one of adversity, the Costa del Sol property market remained dynamic. The land sector was particularly strong as new builds continued to gain ground in the market.
Based on figures for last year, the report expects “a high level of significant activity in the land market generally and specifically on the Costa del Sol”.
Strong new-build market
The uptick in demand for land lies in the marked rise in new-build sales during 2020. Malaga province, led by the Costa del Sol and Malaga city, had by far the highest transactions of new properties last year.
Specifically, 5,151 new homes were sold in the province. Malaga city led the sales board with 1,531, followed by Estepona with 976 and Marbella with 323. As a result, the new-build share of the Costa del Sol property market has risen from around 11% pre-pandemic to 20 to 30% currently.
Key takeaway – new-build properties now represent almost a third of all sales on the Costa del Sol.
The report compares square metre prices on the Costa del Sol as well as supply. In Q2 this year, Marbella had one of the most expensive new-build markets. Apartments cost an average of €4,338 per m² and detached properties, €4,100 per m². There were 789 multi-family on the market and 308 single-family homes.
The supply of new-build property was high in Estepona with 1,531 apartments available, costing €3,084 per m². In addition, there were 303 single-family homes, priced at €2,858 per m².
Slightly further down the coast in Casares, new-build homes reached their highest price. The 142 apartments for sale had an average price of €4,346 per m² and the 32 detached homes, generally luxury villas, €7,497 per m²
Rising demand for new homes
Since the pandemic arrived, shifts in buyer preferences have placed new-build properties at the centre of the Costa del Sol property market. The report notes a marked rise in the demand for new homes, generally larger and with more generous outdoor spaces than resale homes.
Key takeaway – new residential projects will be launched in Malaga and the Costa del Sol this year.
Prospects for the Costa del Sol property market
In terms of prices, the report believes that there are no indications that house prices will drastically change in the next year. On the contrary, it forecasts stability with slight increases during the rest of 2021.
The report also points out that levels of fund liquidity are at record highs. The Costa del Sol market is already a key investment destination for international funds, with many behind new-build construction projects in Marbella and Estepona.
Key takeaway – “expect a quick reactivation in terms of non-resident international demand on the Costa del Sol in Q3 and Q4 this year”.
Get ahead of the reactivation
At Realista, we have seen a steady increase in interest and sales over the last year, more pronounced since international travel has returned to the Costa del Sol. We too, believe that reactivation will be strong over the next few quarters.
If you’d like to get ahead in the game, get in touch with our expert team. Their local knowledge of the market, its current situation and price trends is second to none and they’ll be only too pleased to help you find your ideal second home on the Costa del Sol.