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The real estate portal Fotocasa reveals that Málaga remains a coveted city for real estate buyers. Despite economic and legal obstacles, the prices of second-hand housing reached a historic record in October, with an average value of 3,189 euros per square meter and a spectacular year-on-year increase of 14.6%. In fact, Málaga is the second Spanish city, after Palma de Mallorca, that has reached maximum prices in both sales and rentals.
This trend is due to a more experienced and financially solvent buyer, unlike the local resident who finds access to housing discouraging. Fotocasa reveals that these rising prices are a constant throughout the year and are not affected by adverse economic factors. Málaga remains a city desired by those looking to be part of the Spanish real estate market, and it does not seem that this situation will change in the near future.
According to Fotocasa, Málaga is already the second most expensive city in Spain, after Palma de Mallorca, in both purchase and rental prices. Regarding sales prices, in February a historic year-on-year increase of 18.2% was reached, even surpassing the pre-bubble heating period. Currently, the average price of second-hand housing in Málaga is 15% above the price recorded during the 2007 bubble, when it was 2,778 euros per square meter.
In a more detailed analysis, this Andalusian city has experienced a "rapid and persistent" increase in prices, far above its sister cities. In fact, prices in the rest of the Andalusian capitals range on average between 1,270 and 1,836 euros per square meter, except for Jaén which is the most affordable, with an average of 1,000 euros per square meter.
The evolution of prices in Málaga marks a significant gap compared to other Andalusian cities and has been exacerbated by the arrival of Covid-19. A trend that began to be noticed after the recovery from the 2008 economic crisis and has reached its peak today. The director of Studies, María Matos, has expressed her concern about this: "The price of housing is reaching record figures again with the fastest acceleration in the last 17 years. We have never detected such a large price increase in such a short period of time. This rise takes us back to levels of 2006, prior to the real estate bubble when the cost of housing experienced significant overheating."
According to Matos, these increases are due to the change in monetary policy by the European Central Bank (ECB) which has resulted in an increase in interest rates, penalizing the average buyer. Additionally, the demand for purchase has been driven by the presence of more solvent and experienced buyers in the market, mostly foreigners with greater purchasing power than the average resident. The fact that Málaga has very little stock of public social housing does not help, further exacerbating the difficulties in accessing housing.
In the rental market in Málaga capital, the situation is also concerning.
Regarding the rental of homes, Fotocasa warns of a situation that is even more concerning. In fact, maximum prices were recorded in 2022, with year-on-year increases that have even exceeded 30% in some months of this year. This figure represents the largest increase recorded to date in Fotocasa. Although certain indices point to a more moderate rise in October (10.4%), it is still a double-digit increase that reflects significant tension in the rental market.
In the case of the city of Málaga, the cost per square meter rises to 13.89 euros, which represents a 65% increase compared to the values recorded 16 years ago, when it was 8.43 euros. For this reason, Matos explains that the high price sustained for so long is what is generating a decrease in demand for renting homes in Andalusia, especially from the most vulnerable groups.
In fact, according to Fotocasa, tenants looking for housing in this region in February 2023 represented 13% of the market. However, six months later, this figure has dropped to 11%. The loss of representation in the market is due to many applicants being forced to withdraw due to the impossibility of accessing rental prices. Consequently, the most vulnerable groups are the most affected by their expulsion from the rental market.
The rental cost in Málaga, like in all of Andalusia and Spain, has reached its historical maximum level with an upward trend. Since the recovery from the financial crisis in 2015, Málaga has followed this trend, but in a more pronounced manner and with much more significant increases.
The shortage in the supply of housing is the main cause of the price increase, which has risen more than 30% in the last year, according to Fotocasa. The gap between supply and demand is becoming increasingly significant because of this.
The sale of properties, the return of tourist homes to the vacation market, and excessive regulation of the market have drastically reduced inventory. However, demand is decreasing because a large number of people cannot afford the high rental prices, considered prohibitive, in Málaga. Mato assures that this is a worrying trend.
