Costa del Sol's Sur in English magazine reported this month that Andalucía's construction sector is mildly optimistic for a better year than 2014. There are now clear signs of a recovery in the residential property market, after four years of near complete inactivity due to the European-wide economic crisis. If you are currently thinking about buying a holiday home in Costa del Sol resorts like Marbella, you should consider making a decision soon, for house prices could rise again.
For the third time this year, data for housing projects in the Malaga Province is showing growth, compared with figures recorded by the College of Architects for previous quarters. Architects are cautious though, warning that a rise in applications to construct new apartments doesn't necessarily mean a full recovery is on the way.
College of Architects advise Caution
Francisco Sarabia, head of the College of Architects, advised cautious optimism. "The figures show that the trend is changing, but only from a downturn to a stabilisation. It is a fragile improvement," he said, explaining that projects for apartment blocks rather than individual homes did indeed show a remarkable recovery in the construction sector, but this increase is only evident in the city of Malaga and in Marbella.
In Marbella at the Costa del Sol for example, 200 apartments (spread over six residential projects) have been approved in the last quarter, the city of Malaga has had projects for 500 apartments approved.
"We have to be cautious and wait for a general growth in this type of project elsewhere in the province, if we are to talk about a trend towards recovery in the medium term," he added.
Developers are more optimistic, seeing the rise as a clear signal of a recovery in the residential housing market.
Between July and September 2015, 922 new homes received approval, an unheard of occurrence since 2010 in Malaga Province's residential property market, where not a single quarter showed such levels of activity previously.
So far this year, 1,797 homes have been approved for construction, the highest result for five years, tripling the 584 homes approved between January and September 2014.
The Property Figures don't lie
According to the date published by the College of Architects, this year has so far seen 610 approvals for new homes to be constructed in the city of Malaga, six times as many as were granted during the same period last year. The western Costa del Sol was granted 716 approvals, of which 444 home-build approvals were for Marbella, quadrupling last year's approval rate for the same period.
In Malaga City, about 50% of the property authorisations went to "official protection" homes, a sector of the market which is also beginning to get better after being hit badly by the economic crisis. At the same time, more approvals have been granted for new properties to be constructed along the eastern coast and Malaga Province inland areas, albeit at a lower rate.
The Developers' View
Violeta Aragón, General Secretary of the Association of Builders and Developers (ACP) of Malaga, expressed more optimism that the College of Architects.
"The authorisation figures coincide with what many people with whom we have regular contact in the construction industry are telling us. They say that they are starting to notice a rise in demand which cannot be met from the housing stock, because they don’t have a great deal of stock left, and that is why they are starting to plan new developments which will be completed within two or three years,” she explained, adding that the construction industry in Malaga had "still a way to go" before returning to its normal output of ca. 12,000 authorisations per annum. "But this upturn is the first step towards a gradual recovery," she said.
Addressing the issue of most planning permits going to the cities of Malaga and Marbella, Violeta said that this made sense, since those were the two places were existing housing stock can't keep up with rising demand: "If there is a real demand for something which is not available in an area, somebody will start to develop it."
Changes in the Bankers' View
She also raised the issue of banks and their changing attitude towards the sector. Now, when builders and private buyers come to discuss finance, banks are prepared to keep an open mind and are willing to listen. Violeta believes this is partly due to the recovery of the employment sector.
She asserted: "There are still families with economic problems, but the banks have changed their attitude."
Good news for all those hoping to leave behind cold Northern climates and relocate to sunny Marbella or buy a holiday home at the Costa del Sol!