For the first time in 3 years Malaga province registered a 1.3% rise for house prices in the first quarter of the year, which brought the average square metre price to EUR 1,466.30, the highest in the Andalucía region of Southern Spain. It was in fact the first quarterly increase since the last quarter of 2010.
Despite a 1.3% rise in the first quarter, Malaga province was still down in a year-on-year comparison with 2013, recent figures published by the Ministry of Public Works revealed. Seen on a 12-monthly basis, the average price for a home at the Costa del Sol was down 5.1%.
The average square metre price for a 100 square metre holiday or permanent home in the Malaga province takes the asking price to ca. EUR 146,630, which represents a whopping -38% fall, compared to house price peaks of EUR 234,830 in the first quarter of 2008, just before the Spanish housing market crashed.
Tourism Surge for Summer 2014
Tourism played a significant role in the trend for overseas house buyers to return to Spain. Mallorca for example has seen a record first quarter for overnight stays and has seen home buyers returning in record numbers too, as have indeed the rest of the Balearic Islands.
At the Costa del Sol, the summer season seems to get longer every year and hotel occupancy rates have soared since Easter 2014 brought with it a surge of short-stay holidaymakers. Marbella for example welcomed the same number of tourists in May and so far in June as the town would normally do in the peak months of July and August. The glamour resort’s seafront promenade cafes and bars, restaurant and shops are heaving with tourists and 4- and 5-star hotels and resorts are reporting increased visitor bookings well into October.
Changing Market Conditions
New markets are emerging to replace or augment traditional ones, both on the tourism and holiday home purchasing front.
Traditionally, British and German tourists and buyers used to favour destinations like Marbella and Mallorca; now Scandinavian, Russian and American visitors come to stay for a holiday – and often return to buy a property in Spain.
Hotel bookings are up, according to the manager at Marbella’s Puente Romano Hotel, and are forecast to remain excellent throughout the summer and well into October. Eventually, a percentage of these visitor numbers returns to buy a holiday home.
The manager in charge of the Los Monteros and Guadalmina hotels, Fernando Al-Farkh, confirmed a similar trend.
He explained how the hotel sector at the Costa del Sol was forced by circumstances to invest in attracting tourism back to the region, when the economic crisis hit Europe: “The more channels that are open the better, and recently there have been many more. For example, for us the number of Russian tourists doubles year after year. Although it is still a minority market for us, the increase is very important,” he stated. He believes that the hard work put in by the Costa del Sol’s tourism board is partly responsible for this positive trend.
To Buy or not to Buy
With so much to do and see all year round at resorts like Marbella it is not surprising especially visitors from Nordic countries want to buy a holiday home here. Resale homes at the Costa del Sol have been very good value for money, but even turnkey luxury apartments appear on the market for less than the average UK hovel or Swedish home.
It remains to be seen if the first quarter rise was the first of many to come. Although Spanish house prices are still forecast to fall for another year at least, the rate at which house prices are decreasing is slowing.
For those still wavering, whether to buy a Spanish property for their retirement, the first quarter increase may well be the signal to start looking for their Marbella dream home at the Golden Mile, in Puerto Banus, in the Sierra Blanca urbanisation, Guadalmina or in El Madronal’s leafy hills.