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Record-Breaking 2025 Performance
At the luxury end, Marbella leads the way, with prices rising to €5,258 per square metre, more than double the national average. Its mix of luxury homes, beaches, and lifestyle keeps it on top of the list for wealthy buyers around the world. This milestone makes Costa del Sol one of Spain’s most dynamic and resilient property markets.
Another defining feature of 2025’s market performance is the dominance of cash-driven transactions, which account for around 40% to 45% of all property sales in Málaga province. This means that the market is not heavily affected by interest rate changes, and demand remains solid even as borrowing becomes more expensive.
Golden Triangle Dominance
The Golden Triangle, which is made up of Marbella, Benahavís, and Estepona, continues to lead the high-end market.
- Marbella remains the top destination for luxury homes and lifestyle.
- Benahavís attracts buyers looking for space, privacy, and gated communities in the hills.
- Estepona is quickly catching up, with prices growing between 15% and 17.4% over the past year. The town has improved its infrastructure, added modern developments, and become a favourite among international buyers.
These three towns continue to dominate sales of high-value homes on the Costa del Sol and are likely to remain the key areas for strong returns.
Branded Residences
A major change in the market is the rise of branded residences; homes linked with five-star hotel brands or luxury brand labels. These properties combine private ownership with resort-style services such as concierge, spa, and security, all under a trusted brand name.
The Costa del Sol has become a global leader in this trend. Many new projects are managed by famous hotel groups, giving buyers a complete lifestyle experience rather than just a property. These residences are especially popular with international buyers who want luxury, convenience, and brand confidence in one package.
The Ripple Effect: Secondary Markets on the Rise
As demand in the Golden Triangle continues to push prices higher, many buyers are turning to nearby markets for better value and growth potential. This ripple effect is driving impressive appreciation in emerging coastal towns such as Algarrobo-Costa, Fuengirola, Ojén, etc.
These areas offer a similar coastal lifestyle, good access to Marbella and Málaga, and new opportunities for both investors and homebuyers.
Many see these areas as the next wave of growth on the Costa del Sol, where property prices are still more affordable but rising fast.
Why Prices Keep Rising
The ongoing price rise is not just about demand; it’s also about limited supply. Across Spain, there is a housing shortage of around 600,000 homes by 2025. On the Costa del Sol, this shortage is even more serious because land is limited, construction is slow, and most new projects are focused on luxury homes rather than affordable housing.
Builders also face rising material costs and labour shortages, which make it harder to increase supply. As a result, prices stay high and are expected to continue growing in the near future.
At the same time, the Costa del Sol’s lifestyle advantages continue to attract buyers from all over the world. The region offers over 300 days of sunshine per year, great international schools, strong transport links, and a relaxed way of life. Many buyers come from Northern Europe for a second home, while others relocate permanently to enjoy year-round sunshine and remote working opportunities.
Regulatory Changes: What’s New in 2025
2025 brought some major policy changes that affect property buyers and investors. The two biggest are the end of the Golden Visa program and the new tourist rental rules.
End of the Golden Visa
Spain officially ended the Golden Visa scheme in April 2025. This program allowed non-EU buyers to gain residency by purchasing property worth €500,000 or more.
The goal of ending it is to improve housing affordability. However, experts believe this will have little impact on the Costa del Sol’s luxury market, since most high-end buyers purchase homes for lifestyle reasons, not for residency. The region’s attraction goes far beyond visa incentives.
Stricter Rules for Tourist Rentals
New rules for (Vivienda con Fines Turísticos), short-term rental properties, are changing the investment landscape. Now, homeowners must get approval from at least 60% (three-fifths) of their building’s community before they can start renting to tourists.
This rule has created a “regulatory moat,” meaning that existing properties with rental licences are becoming more valuable, while getting a new licence is much harder. For investors, that makes already-licensed VFT properties a very smart purchase, as their value and rental potential are likely to increase.
What to Expect in 2026 and Beyond
Despite record prices, analysts expect the Costa del Sol market to stay strong but move into a more stable and sustainable phase. Projections suggest annual price increases between 3% and 9%, pointing toward a more sustainable phase of expansion rather than a bubble.
Keeping these things in mind, there are several key investment strategies that you need to follow for the coming period. These strategies include:
Focus on Core Luxury Areas
Marbella, Estepona and Benahavís remain the safest and most desirable areas for long-term investment. They have global appeal, excellent amenities, and steady demand from high-net-worth buyers.
Look for the Next Growth Zones
Secondary markets like Ojén, Fuengirola, and Algarrobo-Costa offer excellent growth potential. These areas are benefiting from improved infrastructure and overflowing demand from the Golden Triangle.
Buy Existing Licensed Rental Homes
With new restrictions tightening the supply of tourist rentals, existing licensed homes are set for value appreciation. They also offer immediate rental income potential in a market with limited short-stay options.
Consider New Developments (Off-Plan)
Buying off-plan can offer better pricing and access to modern, energy-efficient homes. However, buyers should always check the developer’s track record and construction progress before committing.
Risks to Monitor
While the outlook remains positive, investors should be mindful of several risks:
- Regulatory volatility, especially around rental rules and land use.
- Construction delays caused by land shortages, rising costs, or a lack of workers.
- Ultra-luxury pricing pressure, where some top-end properties may be priced above what buyers are willing to pay.
Even with these risks, the Costa del Sol continues to attract strong, genuine demand, which is supported by global lifestyle trends and the limited supply of high-quality homes.
Conclusion
The Costa del Sol property market in 2025 has reached record highs, but it remains strong and well-balanced. The combination of limited housing, cash-rich buyers, and international appeal means this is not a bubble; it’s an evolution of a stable and high-demand market.
As the region enters 2026 and beyond, growth is expected to continue at a healthy pace. Investors who understand the market and choose carefully, whether in the Golden Triangle or in rising towns nearby, are likely to see solid returns.
The Costa del Sol has proven it’s not just a place to visit, but a place to invest and live. With sunshine, lifestyle, and stable demand on its side, it is set to remain one of Europe’s most reliable real estate markets.
