The Welcome Home property exhibition held recently in Malaga was small, but entirely focused on new builds. An unusual aspect in a province where the construction of new homes has all but been at the standstill since 2011. Another aspect that grabbed my attention was the up-beat atmosphere at the show. And the big interest in Malaga property from foreign investors.
If you look at the facts, the wind does seem to have changed in the Spanish property market. The latest official statistics show a couple of green shoots over the last two quarters. These shoots are small and short, but they definitely stand out against the many long red ones. And the stand-out location in the Spanish property market is Malaga.
According to figures from BBVA Real Estate Research, the 71,000 sales in Malaga province last year represented a 16.5 per cent increase on 2013. And for this year, they’re predicting 85,000 property sales for this year. That’s nearly 20 per cent growth, real wind in the sales.
Diario Sur newspaper statistics offered at the Malaga property show claim the province is leading Andalucia and Spain. Prices might be down 34 per cent on their peak in 2008, but they’ve risen 1.4 per cent over the last year. The stats also highlight the 12.9 per cent increase in sales between January and March this year compared to the same period last year.
The main reason behind Malaga’s comeback on the property scene can be found in the foreign market. BBVA claims that foreigners buy two-thirds of the property. Those in Marbella and surrounding areas (Estepona and Benahavís) buy holiday homes and those in Malaga city itself purchase purely for investment.
This demand has led to new construction. It’s still small scale when you compare it to the building-crazy years in the 2000s. BBVA figures speak for themselves – in 2008, nearly 48,000 new properties were started in Andalucia; in 2014, they numbered just under 5,000. But it’s now happening, particularly in places like Malaga and Marbella where the off-plan stock is virtually non-existent.
There were several new-build options on offer at the Malaga property show and all seemed to have the foreign buyer in mind. Choice included an apartment block in the city centre, handily located just down the road from Picasso’s birthplace. The properties are nearly finished and come with garage spaces and a rooftop pool and solarium. A good bet for a holiday home with great holiday letting potential.
Another big attraction is a large block due to start in Teatinos in the autumn. Investor interest here is purportedly high, particularly those looking to buy-to-let. The location near plenty of employment opportunities, shops, schools and medical centres plus the metro on the doorstep ticks all the boxes for long-term renters.
So, times are definitely changing in the world of property on the Costa del Sol and as BBVA Real Estate Research put it, 2015 will be the year of reversal in construction trends.