Timing is everything with most investments. Despite over five years of continued housing prices rising, Costa del Sol’s real housing price is still 23% (-32% inflation-adjusted) below peak levels witnessed before the global financial crisis. Based on recent years’ performance, we have compiled our forecasts for demand, sales, prices and interest rates for the future.
Southern Spain’s Costa del Sol, which stretches across the coastline of Malaga province, is renowned for its sunshine, great food, vibrant people and starkly contrasting landscapes. These factors have all played a part in helping fuel growth in property development during the last 50 to 60 years.
In 2022, two years after the Covid-19 pandemic brought everyone’s lives to an abrupt halt, the real estate market got back on its feet and is now catering for new types of buyers.
Following the harsh lockdowns that most of the world suffered throughout 2020, outdoor space is now more sought-after than ever before. The Costa del Sol is the perfect place for people to purchase their dream homes, and it even offers different types of lifestyles.
High Interest for Costa del Sol
According to the latest figures from the Spanish Institute of Statistics (INE), there were 91 sales of properties on the Costa del Sol every day in 2021, which leads Costa del Sol to be in the fifth position for most sales last year in terms of national rankings. 2021 will go down on record as one of the busiest years for Spanish property generally and we’re predicting another busy year for the local property market in 2022, here supply is dwindling slightly as a result.
We also see more investment funds raising money for new projects along the coast as the market keeps rising and an increased interest in the area is seen from multiple nationalities who see Costa del Sol as the perfect place for investing in properties. We have access to the best properties on the Costa del Sol, including some stunning new developments.
If you’re planning to buy in 2022, get in touch with our expert team, who will be more than happy to help you find your new home.
Prices are still on the upward trend
Increased demand inevitably leads to price rises and the Costa del Sol property market has experienced steady rises over the last 12 months. With sustained demand, we expect prices to continue slowly but surely upwards during 2022 with a maximum increase of 10%.
More sales of high-end properties
The Costa del Sol, particularly in Marbella and Benahavis, is home to some of Spain’s most expensive real estate. Sales of luxury homes (valued at over €1 million) and ultra-luxury homes (over €3 million) are the highest in Spain.
We predict this trend will continue over the next 12 months, particularly in the new-build sector. The Costa del Sol is currently building some of the finest properties in Europe, appealing directly to high-net-worth individuals who are also attracted to the area’s superior standard of living.
Is it Safe to Buy Property in Spain?
Yes, “as safe as houses” as they say. Here’s why: the latest housing pricing data from Spain’s National Statistics Institute (the Instituto Nacional de Estadistica (INE)) shows a steady rise in property prices. Nothing is sharp and steep, just slow, gradual growth. It is characteristic of a stable real estate market in Spain that’s been growing since late 2012.
Spanish house prices rose 1.68% during Q3 2020 (2.2% inflation-adjusted). In the previous year, property prices in Spain in 2019 posted a 4.68% rise according to the Instituto Nacional de Estadistica. On a quarterly basis, house prices increased 1.15% in Q3 2020 (1.67% inflation-adjusted).
Price increases by property type:
- Existing properties: prices rose by 0.76% during Q3 2020 (1.27% inflation-adjusted).
- Newly constructed properties: prices rose by 7.46% year on year in Q3 2020 (8.01% inflation-adjusted) – up from the annual rise of 6.64% in Q3 2019.
Interest rates are still low
The Euribor, the benchmark interest rate for mortgages in Spain, has remained in negative territory throughout 2021. Even if interest rates move up slightly this year, they are still in record low territory.
According to Bankinter, the 12-month Euribor will stand at -0.32% in December next year. However, the figure is only marginally higher than the current rate (-0.45%) meaning that mortgage payments will vary little in 2022. Therefore, homebuyers in Spain will continue to benefit from affordable home loans, adding further to demand.
We and many expects believe that due to the high interest from international buyers, the increase of developments and the fact that we see a stable real estate market in Spain that’s been growing since late 2012, we expect this to continue for years to come. Costa del Sol is not a real estate market which should be compared to other markets in Europe, as it is an international hub for investors an buyers world wide.
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The above information has been prepared for informational purposes only. It does not constitute financial advice. Past property price indications are not suggestive of future Spanish property price forecasts.