Sur in English released an analysis for the Malaga province real estate market 2025. We have extracted some of the key points which makes compelling reading if considering a home purchase for investment or residential purposes.
Malaga emerged as the second most expensive province in Spain for house prices in 2024, with a 13% increase according to Tinsa by Accumin. This rise sharply contrasts with Spain’s overall average increase of 4.4%. Only Soria saw a higher price surge, with a 15.3% hike. Another property valuation firm, Gesvalt, reported an even steeper rise of 15.6% for Malaga.
As 2025 unfolds, the question on everyone’s mind is whether the surge in property prices will persist, especially given the challenges faced by many aspiring homeowners. Sur In English consulted five experts for their views, and the consensus is clear: demand and limited supply will keep prices climbing, though the extent varies depending on location and market dynamics.
Predictions for Malaga City and Beyond
Patricio Palomar, director of alternative investments at AIRE Partners, predicts that property prices in Malaga city will grow in line with inflation, estimating increases of 3% to 5% in areas like Ciudad Jardín, Martiricos, and Cruz del Humilladero. In more desirable locations such as Cerrado del Calderón, El Limonar, and Teatinos, rises could exceed 6%.
In the wider province, population displacement from the city center due to affordability issues is expected to drive growth in Torremolinos, Benalmádena, Mijas, and Rincón de la Victoria. Palomar also foresees urban expansion in Cártama, poised to become a key commuter hub.
Tourist-heavy areas like Marbella may see stabilising valuations, but Manilva and Estepona could experience growth exceeding 7%.
Construction Costs and Housing Demand
According to Carlos Smerdou, CEO of Foro Consultores, Malaga’s housing market is heavily influenced by the rising cost of construction and continued strong demand. “Sometimes sales of developments are stopped until we know how much they are going to cost to build,” Smerdou explained. He anticipates price increases of 10% or more in 2025, driven by falling interest rates and demand outpacing supply.
Smerdou also highlighted the significance of cash buyers, who account for more than half of all transactions, and keeps investment in housing high.
The Role of Younger Buyers
Gonzalo Bernardos, an economics professor at the University of Barcelona, believes the real estate market will remain “red hot” in 2025. He forecasts a 12% price increase for existing homes and 15% for new builds, driven by younger buyers under 40 attempting to escape the “rental trap” with financial assistance from their parents.
Bernardos predicts a 25% rise in the number of mortgages issued this year, accompanied by a 35% increase in credit granted by banks.
Supply Challenges and Luxury Demand
José Antonio Pérez, a professor at the Real Estate Business School in Malaga, emphasised the acute shortage of housing supply. To address this, he called for the mobilisation of public land and increased investment in affordable housing. The province is expected to see 8,000 new homes completed in 2025, up 10% from 2024, but the total number of transactions is likely to remain stable at around 18,225.
Broader Economic Trends
Cristina Arias, research director at Tinsa by Accumin, highlighted the role of falling interest rates and resilient employment in maintaining strong residential demand. However, she also warned of affordability challenges for local residents, with disposable income swallowed up by high prices—74% in Marbella alone.
Despite these difficulties, Arias remains optimistic about sales activity in 2025, citing robust demand from foreign buyers and the continued recovery of household purchasing power.
Looking Ahead
Malaga’s property market remains one of the most dynamic in Spain. While affordability challenges persist, the combination of strong demand, foreign investment, and economic recovery signals continued growth. Whether you’re a buyer, seller, or investor, staying informed on market trends is essential in this ever-evolving landscape.
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Danny
This article is based on a report from Sur In English. All quotes and data have been attributed to their respective sources.
