Málaga is a destination that is firmly set upon the map for both Spanish and international buyers and lifestyle seekers, and it has been so since the 1960s. However, when we say that, we automatically refer to the Costa del Sol – the stretch of coastline that extends from Torremolinos to Sotogrande. At its epicentre is Marbella, the sparkling jewel in the crown of luxury homes and resort areas, a place with a glamorous reputation that extends across the world… but what about the regional capital itself?

Up until the beautification programmes launched by mayor Francisco de la Torre at the turn of the century, Málaga was an interesting but somewhat rundown Mediterranean port city. Most people turned right at the airport and headed straight for the coast, largely missing its hotels and certainly its real estate. It wasn’t until a decade later that the appetite for Málaga properties began to grow, and as the first pioneers focused upon the historic centre and snapped up its gorgeous period buildings to renovate and add to the global Airbnb pool, the dynamic began to change.

The once cheap opportunities available in Málaga’s beautiful classical quarter grew more expensive, and development spread outwards into neighbouring residential areas, where the likes of Soho, Parque Ayala and Huelin became increasingly fashionable districts. The gentrification of the city, both public and through private renovation, and the construction of the first new housing stock in years, is taking pace at an impressive rate, and while the Covid-crisis initially slowed down its momentum, the pace of development has been resumed.

A Growing Alternative To Marbella

Such is the excitement, potential and critical mass achieved that Málaga is now a viable alternative to the property markets of Marbella and other parts of the Costa del Sol. It is, of course, popular with affluent and professional locals, but increasingly also with international buyers, many of who follow tourists in viewing the city as the ‘second Barcelona’. With the Catalan capital now beset by problems of its own, Málaga draws people keen on having a pied à terre in a cultural hotspot such as it has become.

Properties here have also proven to be a good investment, with prices rising steadily from under €1.000/m2 not so long ago to €2.150 in Q3 of 2021 – 3.5% up in the course of the year so far. TINSA, Spain’s largest valuation company, reports a year-to-year increase of 12.9% in Málaga, over double the national level. Savills Aguirre Newman, a specialist in Spanish urban real estate, expects continued growth in different segments of the market, including residential, commercial, retail, logistics and hotels.

With Málaga now the sixth-most valuable real estate city on a per/m2 basis, the top-performing areas within it are Puerto de la Torre, Teatinos and the eastern part of town – reflecting a recent trend towards the suburbs that seems to be in line with post-Covid experiences elsewhere in the world. The east has now surpassed the centre both in price and trend, with the historic quarter losing some ground in the latest months. A square metre now commands almost €3.000 in the east, where city living has the added attraction of proximity to beaches.

Growing Sales Volumes

Property transactions in Málaga city reached 9,225 in Q3 of 2021, up almost a quarter on the same period last year, and while the resale market rose by one-sixth, sales of new-build homes shot up by almost half to produce the highest modern home transaction level in eight years. Overall, the city ranks fifth in the country in overall property sales, and third in the proportion of newly built homes sold – and if you’re wondering how foreign buyers stack up in this, well they make up over a quarter of the total now, and it’s rising all the time.

This is surely driven by the appeal of the culture and lifestyle offered by Málaga, but also by solid rental returns, which outstrip those of Madrid and Palma de Mallorca – a factor driven not only by a strong market for holiday stays, but also by the arrival of many professionals now working at the nearby Parque Tecnológico de Andalucía. In all, ROI on property rentals in Málaga range between 4% and 6%, and this in the face of large holiday let supply and prices that have slipped back almost 5% to an average rate of around €9,50/m2, according to Idealista.

If average selling times of little more than a month are an indication, the Málaga property market has bounced back strongly from the Covid impact of 2020 to resume its upward movement and growing appeal among international buyers and investors. Property prices held their own last year, and are back up on the rise in 2021, expected to continue doing so in the near future too – and with many of the buyers young, qualified and affluent, their appetite for the city and its lifestyle makes Málaga an increasingly powerful alternative to Costa del Sol living and homeowning.

Marbella Agency Opens New Málaga Office

On Thursday 2nd December, Strand Properties inaugurated its stylish new offices on Calle Marín García in the historic centre of Málaga, becoming one of the first Marbella-based real estate companies to do so. The move comes in recognition of the exciting phase the city’s property market is going through, evolving as it is from a largely low-key local one to an increasingly fashionable place to invest, own and live.

Anssi and Sirena Kiviranta, founders of Strand Properties, believe in Málaga and its future. No strangers to starting new ventures, they founded a highly successful real estate company that grew to become one of the leading brands in Finland, with 200 agents in 15 cities. A few years ago, they brought the concept to Marbella, and with Strand Properties now well-established in its market, the husband and wife team have embarked upon Málaga.

“We love the energy and potential of the city, which complements Marbella and the other parts of the Costa del Sol so well,” says Sirena. The company’s signature style of presentation and its design and lifestyle-driven approach to real estate is popular with a new generation of affluent buyers, and it forms the basis for an expansion plan across Spain, with a new office scheduled to open in Palma de Mallorca in the coming year.

“Right now, Málaga is one of the most up-and-coming cities in the country, with a rapidly-evolving property sector and new renovation projects, modern developments and also newly fashionable residential districts creating a dynamic and highly diverse market. Watch this space.”