As followers of our blog will know, the real estate market on the Costa del Sol is currently busy. Sales so far this year have been buoyant up and down the coast as buyers snap up the best homes, confirming that this part of southern Spain continues to be a perennial favourite with buyers.
But why are Costa del Sol properties in such high demand now? And is this trend likely to continue?
Tourism is back
Tourism and the holiday home market go hand-in-hand as so many visitors fall in love with the Costa del Sol and want to buy property there. And after an almost empty 2020 and lukewarm 2021, tourism is now back at full speed.
According to the latest official figures from Exceltur, Spain’s GDP from tourism is set to reach almost €152 billion this year. The figure is the equivalent of 98% of tourism’s GDP in 2019, which means that the sector is back on track and demand for Costa del Sol properties with it.
Foreign demand is back
International buyers have returned to Spain en masse so far this year. As a result, sales to foreigners rose to 13.2% of the total in the first quarter, the highest since late 2007. “Foreign demand for property has made a vigorous recovery since 2020,” said CaixaBank Research.
The Costa del Sol has experienced the same phenomenon and this scenario appears to be here to stay. Google searches for property in the area remain strong and everything points to a continuation of demand.
British buyers have returned to the forefront of international purchases after a brief hiatus caused by Brexit. However, other nationalities such as Dutch, Germans and Swedes are hot on their heels. CaixaBank attributes this surge of demand to the heating up of property market in the Netherlands, Germany and Sweden.
But will it continue?
According to CaixaBank, the answer is a resounding yes because of three factors:
- European population estimates point to a significant increase in the number of retirees and Spain ranks as one of the most attractive retirement destinations.
- Spain is a very competitive tourist destination and a favourite among Europeans who will continue to be drawn to the holiday home market, including that on the Costa del Sol.
- New employment trends, including working from home, allow Europeans to live in Spain for longer periods of time while they work remotely.
As a result, the bank’s research points to sustained foreign demand for real estate throughout Spain, including the Costa del Sol.
Foreign investment is back
And with it, pressure on prices. Costa del Sol properties have increased considerably in value over the last year, driven in part by foreign demand. Prices currently stand at 33.5% higher than the Spanish average and analysts believe that this trend too will remain in the immediate future.
Bricks and mortar offer compelling returns in today’s scenario of rising inflation, particularly in the medium and long term. As a result, Costa del Sol properties, especially those at the higher end of the market, are highly sought-after among investors.
Find your Costa del Sol property
If you too are drawn to the Costa del Sol property market, let us help you find the home that ticks all your boxes. We’ve been offering our real estate services in the greater Marbella area for 30 years, so we know it like the back of our hands. Get in touch with our team now.