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Property prices in Malaga are experiencing exceptional growth, with the city recording one of Spain's highest price increases at 17-20% year-on-year as of June 2025.
Malaga has emerged as Spain's second most expensive province for housing after Madrid, driven by robust demand from both local and international buyers. The average price per square meter in Malaga city has reached €3,247-€3,477, marking a historic high and positioning the market among the most dynamic in Europe.If you want to go deeper, you can check our pack of documents related to the real estate market in Spain, based on reliable facts and data, not opinions or rumors.
Property prices in Malaga are surging at 17-20% annually, with the average price reaching €3,247-€3,477 per square meter in June 2025. The market shows no signs of slowing down, driven by strong economic growth, booming tourism, foreign investment, and severe housing supply shortages.
Cruz de Humilladero (+26.7%) and Teatinos (+25.5%) lead neighborhood price increases, while luxury properties and new builds show the strongest appreciation. With mortgage rates falling to 3.2% and tourism at record levels, experts forecast continued growth of 4-8% annually through 2027.
| Key Indicator | Current Value (June 2025) | Year-on-Year Change |
|---|---|---|
| Average Price (€/m²) | €3,247-€3,477 | +17-20% |
| 5-Year Price Growth | +57.4% | Highest in Spain |
| Foreign Buyer Share | 33-34% | Up from 29% in 2023 |
| Mortgage Interest Rate | 3.2% | Down from 4% in 2023 |
| GDP Growth (Malaga) | 3.5% | vs 2.5% Spain average |
| Tourism Arrivals (2024) | 14 million | +3.17% increase |
| Average Rental Price | €15.20/m²/month | +10.6% increase |
| Price Forecast 2025-2027 | +4-8% annually | Moderate growth expected |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What is the current average price per square meter in Malaga as of June 2025?
The average price per square meter in Malaga city has reached historic highs of €3,247-€3,477 as we reach mid-2025.
According to the latest data from Idealista and Indomio, residential property prices in Malaga city center have surged to these record levels, with some premium neighborhoods like Este and Centro commanding prices exceeding €4,000-€4,400 per square meter. The provincial average stands slightly higher at €3,320-€3,570 per square meter.
This represents a remarkable transformation for Malaga's property market, which has seen prices more than double since 2014, with a 107% total increase over the past decade. The city has consistently outperformed national averages, establishing itself as Spain's second most expensive province for residential property after Madrid.
The price variations across different neighborhoods are significant. While the most expensive areas like Este (€4,400+/m²) and Centro (€4,000+/m²) cater to luxury buyers, more affordable options exist in districts like Campanillas (€2,034/m²) and Ciudad Jardín (€2,155/m²), though even these areas are experiencing rapid price appreciation.
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How much have property prices increased in Malaga over the past year?
Property prices in Malaga have skyrocketed by 17-20% year-on-year as of June 2025, marking one of the highest increases in Spain.
Multiple sources confirm this exceptional growth rate, with Idealista reporting a 19.4% increase in April 2025 compared to April 2024, while some reports indicate increases as high as 20% for certain property types. This surge far exceeds Spain's national average increase of 10.3%, positioning Malaga as the second-fastest growing property market in the country.
The annual increase translates to substantial monetary gains for property owners. For a typical €400,000 property, owners have seen their asset appreciate by €68,000-€80,000 in just twelve months. This rapid appreciation has created significant wealth effects for existing homeowners while simultaneously pricing out many first-time buyers.
The sustained price growth reflects fundamental market dynamics rather than speculative bubbles. Strong employment growth (10,000+ jobs created monthly), record tourism figures, and persistent housing shortages continue to fuel demand. With unemployment dropping to 13.6% and the local economy growing at 3.5% annually, the price increases appear supported by solid economic fundamentals.
Looking at the five-year perspective, Malaga's property prices have increased by an impressive 57.4%, the fastest growth rate among all Spanish provincial capitals. This long-term trend demonstrates the market's resilience and attractiveness to both domestic and international investors.
Which neighborhoods in Malaga are experiencing the fastest price growth in 2025?
Cruz de Humilladero leads Malaga's neighborhood price surge with an extraordinary 26.7% year-on-year increase, reaching €2,791 per square meter.
The top-performing neighborhoods showcase diverse areas attracting different buyer profiles. Teatinos follows closely with a 25.5% annual increase to €3,503/m², driven by its proximity to the University of Malaga and appeal to families and students. Bailén-Miraflores has seen an even more dramatic 35.6% surge to €2,838/m², while Churriana near the airport jumped 23.1% to €2,693/m².
These rapidly appreciating neighborhoods share common characteristics: improving infrastructure, relative affordability compared to central districts, and strong rental demand. Ciudad Jardín (+21.1% to €2,155/m²) and Puerto de la Torre (+17.7% to €2,544/m²) represent emerging areas where buyers seek value while still enjoying good connectivity to the city center.
| Neighborhood | Current Price (€/m²) | YoY Increase (%) |
|---|---|---|
| Bailén-Miraflores | €2,838 | +35.6% |
| Cruz de Humilladero | €2,791 | +26.7% |
| Teatinos | €3,503 | +25.5% |
| Churriana | €2,693 | +23.1% |
| Ciudad Jardín | €2,155 | +21.1% |
| Puerto de la Torre | €2,544 | +17.7% |
| Este | €4,400+ | +10-13% |
| Centro | €4,000+ | +9-10% |
Interestingly, the traditionally expensive neighborhoods like Este and Centro, while maintaining the highest absolute prices, show more moderate annual increases of 10-13%, suggesting a shift in market dynamics as buyers seek value in emerging areas.
What property types are seeing the biggest price increases in Malaga?
New build properties are experiencing the highest price growth in Malaga, with annual increases of 15% expected in 2025, outpacing resale properties.
The new construction segment benefits from several factors driving premium pricing. Modern amenities, energy efficiency features, and smart home technology appeal to both local buyers and international investors. Properties with outdoor spaces like terraces, balconies, or gardens command particular premiums, reflecting post-pandemic lifestyle preferences.
Luxury villas and high-end apartments in premium locations are seeing exceptional appreciation. In areas like Marbella (part of Malaga province), luxury property sales increased by 19.47% in early 2024 compared to 2019, with prime villas and beachfront properties fetching record prices. The average price of new multi-family housing in Malaga was 18% higher than in 2022.
Apartments in central locations and near universities show strong performance due to rental demand. Properties suitable for short-term rentals, despite new regulations, continue to attract investor interest with potential gross yields exceeding 10% annually in prime locations.
Townhouses and family homes in suburban areas are experiencing increased demand as buyers seek more space. Areas like Teatinos, with good schools and family amenities, see particularly strong appreciation for these property types. The trend reflects changing buyer priorities, with families willing to pay premiums for properties offering home offices, gardens, and proximity to green spaces.
How do current mortgage rates affect Malaga's property market in 2025?
Mortgage interest rates in Malaga have fallen to 3.2% in 2025, down from 4% in 2023, significantly boosting buying power and market activity.
This decline in rates, with the Euribor expected to drop further to 2.1-2.15% by year-end, has reinvigorated the property market. Lower borrowing costs mean buyers can afford higher property prices while maintaining similar monthly payments, effectively increasing purchasing power by approximately 15-20%.
The impact on market dynamics is substantial. Experts predict a 25% rise in mortgage applications in 2025, with a 35% increase in total credit granted by banks. This surge in financing availability particularly benefits younger buyers under 40, many receiving family support for deposits, who are desperate to escape the "rental trap" of ever-increasing rents.
Despite improved financing conditions, affordability remains challenging. The average household in Malaga dedicates 58% of disposable income to housing costs, well above the recommended 30% threshold. In premium areas like Marbella, this figure reaches 74%, highlighting the severe affordability crisis for local residents.
Interestingly, over 50% of property transactions in Malaga are cash purchases, with foreign buyers accounting for 44% of cash transactions. This high proportion of cash buyers provides market stability and reduces sensitivity to interest rate fluctuations, supporting continued price growth even during periods of rate uncertainty.
What role does foreign investment play in Malaga's property price growth?
Foreign buyers account for 33-34% of all property transactions in Malaga as of 2025, up from 29% in 2023, making them a crucial driver of price growth.
British buyers lead the international demand, followed by purchasers from Germany, Netherlands, France, and increasingly from North America. These buyers are attracted by Malaga's climate, lifestyle, improved infrastructure, and the city's transformation into a tech and cultural hub. The strength of foreign currencies against the euro has also enhanced their purchasing power.
| Buyer Origin | Market Share | Preferred Property Types |
|---|---|---|
| United Kingdom | Largest segment | Coastal properties, golf resorts |
| Germany | Growing rapidly | City apartments, new builds |
| Netherlands | Significant presence | Luxury villas, beachfront |
| France | Stable demand | Traditional homes, city center |
| North America | Emerging market | Luxury segment, investment properties |
The impact of foreign investment extends beyond transaction numbers. International buyers typically purchase properties 20-30% more expensive than the local average, pushing up prices in desirable neighborhoods. Their preference for turnkey properties and willingness to pay premiums for sea views or golf course locations creates price pressure in specific market segments.
The proposed 100% property tax on non-EU buyers announced in early 2025 has created uncertainty but hasn't yet dampened demand. Many international buyers are accelerating purchases to avoid potential future restrictions, paradoxically increasing short-term demand and price pressure.
How is Malaga's booming tourism industry impacting residential property prices?
Malaga's record-breaking 14 million tourists in 2024, generating over €21 billion in revenue, has created intense pressure on residential property prices through increased demand for both short-term rentals and second homes.
The tourism boom has transformed Malaga's property market dynamics. Areas with high tourist appeal command premium prices, with properties suitable for vacation rentals achieving gross yields of 10% or more annually. The average daily rate for short-term rentals reached €161.75 in 2025, up from €138.29 the previous year, with occupancy rates hitting 82%.
However, the city's response to overtourism is reshaping the market. In November 2024, Malaga banned new short-term rental registrations in 43 neighborhoods where such rentals exceed 8% of housing stock. This affects popular areas including El Ejido, La Malagueta, and Pedregalejo, potentially shifting some properties back to the long-term rental market.
Despite restrictions, tourism's impact remains profound. Hotel occupancy and tourist spending continue breaking records, creating employment and attracting international property investors. The city's enhanced cultural offerings, including new museums and events, have elevated its status from a beach destination to a year-round cultural hub, sustaining property demand beyond the traditional summer season.
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The spillover effects are significant. Restaurant workers, tour operators, and hospitality staff compete with locals for housing, while successful Airbnb operators reinvest profits into additional properties. This cycle perpetuates price increases, particularly in central and coastal neighborhoods most attractive to tourists.
What are rental yields like across different Malaga neighborhoods in 2025?
Rental yields in Malaga range from 4.04% to 10.3% depending on the neighborhood, with the highest returns found in Palma-Palmilla due to lower property prices.
The variation in yields reflects diverse investment opportunities across the city. Long-term rentals in Malaga deliver an impressive 7.8% average return over five years, the highest in Spain. Premium areas like Centro offer lower yields around 4-5% due to high property prices, while emerging neighborhoods provide better returns for investors.
- Palma-Palmilla: 10.3% yield - Lower property prices attract investors seeking maximum returns
- Este (Pedregalejo/El Palo): 9.6% yield - Beach proximity and tourist appeal drive strong rental demand
- Ciudad Jardín: 8%+ yield - Family-friendly area with steady long-term rental market
- Cruz de Humilladero: 8%+ yield - Emerging neighborhood with improving infrastructure
- Centro: 4-5% yield - High property prices compress yields despite strong rental demand
- Teatinos: 6-7% yield - University proximity ensures consistent student rental market
Short-term vacation rentals offer even higher returns, with gross yields exceeding 10% annually in tourist-favored locations. However, new regulations limiting tourist rentals in 43 neighborhoods may redirect investment toward long-term rental strategies, potentially stabilizing yields in affected areas.
Rental prices continue climbing, with the average reaching €15.20 per square meter per month in March 2025, up 10.6% year-on-year. The most expensive rentals are in Centro at €16.40/m²/month, while more affordable options exist in suburban districts, though prices are rising rapidly across all areas.
What economic factors are driving Malaga's property price increases?
Malaga's economy is growing at 3.5% annually in 2025, outpacing both Andalusia (2.5%) and Spain (2.4%), creating the fundamental conditions for sustained property price growth.
The city's economic transformation is remarkable. Over 10,000 jobs are created monthly, with unemployment falling to 13.6%, down 3.2 percentage points year-on-year. The employment boom spans multiple sectors: technology, tourism, construction, and services, creating diverse demand for housing across different price points.
Infrastructure investments have enhanced Malaga's appeal significantly. The expanded metro system, renovated airport handling 100+ million passengers annually, and high-speed rail connections to Madrid position the city as a major European hub. The arrival of major tech companies has earned Malaga the nickname "Silicon Valley of Southern Europe," attracting high-earning professionals who drive up property demand.
The population dynamics tell a compelling story. Malaga attracts 36,000+ university students annually, creating consistent rental demand. The aging population, with nearly 500,000 seniors expected by 2037, drives demand for accessible properties and retirement communities. Meanwhile, 23.25% of residents are foreign-born, with 97% of new residents arriving from abroad.
Supply constraints amplify price pressures. Despite strong demand, only 8,000 new homes are expected to be completed in 2025, a 10% increase from 2024 but insufficient to meet demand. Construction costs have risen sharply, with developers sometimes halting sales until final costs are determined, further limiting supply and supporting price growth.
How do Malaga property prices compare to other major Spanish cities?
Malaga's property prices of €3,247-€3,477 per square meter position it as Spain's fourth most expensive city, with price growth outpacing most major urban centers.
The comparison reveals Malaga's remarkable ascent in Spain's property hierarchy. While Madrid (€3,971-€5,467/m²) and Barcelona (€3,842-€4,875/m²) remain more expensive in absolute terms, Malaga's 17-20% annual growth rate exceeds both cities' 16-18% and 11-12% respectively.
| City | Avg. Price (€/m²) | YoY Increase (%) | 5-Year Growth (%) |
|---|---|---|---|
| Madrid | €3,971-€5,467 | 16-18% | 82% |
| Barcelona | €3,842-€4,875 | 11-12% | 43% |
| Malaga | €3,247-€3,477 | 17-20% | 57.4% |
| Valencia | €2,400-€2,600 | 8-10% | 35% |
| Seville | €2,200-€2,400 | 7-9% | 32% |
| Spain Average | €2,391 | 10.3% | 29% |
Within the Costa del Sol region, Malaga city offers relative value compared to exclusive areas like Marbella (€4,789/m²) and Estepona (€4,021-€4,163/m²), though it's more expensive than Fuengirola (€3,795/m²). This positioning attracts buyers seeking urban amenities at prices below the most exclusive coastal resorts.
The rapid price growth has transformed Malaga from a secondary market to a primary investment destination. Its combination of lifestyle benefits, economic dynamism, and relative affordability compared to Madrid and Barcelona continues attracting both residents and investors, suggesting sustained price pressure ahead.
What new housing policies might affect property prices in Malaga in 2025-2026?
Several major policy changes are set to impact Malaga's property market, including a proposed 100% tax on non-EU buyers and new taxes on empty homes starting in June 2025.
The most controversial proposal targets foreign speculation with a 100% property tax on non-EU, non-resident buyers. While not yet enacted and facing legal challenges, the announcement has paradoxically accelerated foreign purchases as buyers rush to complete transactions before potential implementation. This surge in demand is temporarily inflating prices in the luxury segment.
Empty home taxation represents a more immediate change. Properties left vacant will face a 1.1-2% simulated income tax, designed to force approximately 30,000 empty units back onto the rental market. This could moderate rental price growth by increasing supply, though the impact may be limited if owners prefer to sell rather than rent.
Tourist rental regulations have already reshaped the market. The ban on new licenses in 43 neighborhoods and the 21% VAT rate on tourist apartments are redirecting properties to long-term rentals. While this benefits local renters, it reduces investment returns and may dampen foreign investor interest in affected areas.
The expansion of public housing aims to address affordability. The government plans to transfer thousands of units to public agencies for social rental, though the 8,000 new homes expected in 2025 remain insufficient to significantly impact market prices. These measures reflect growing political pressure to address the housing crisis but are unlikely to reverse the fundamental supply-demand imbalance driving price growth.
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What are the property price forecasts for Malaga over the next 5-10 years?
Property prices in Malaga are forecast to grow 4-8% annually through 2027, with some experts predicting 10-12% increases for 2025 before moderating.
Short-term predictions vary among experts but remain universally positive. Economics professor Gonzalo Bernardos forecasts 12% growth for existing homes and 15% for new builds in 2025. Carlos Smerdou of Foro Consultores expects 10% or higher increases, driven by falling interest rates and persistent supply shortages. More conservative estimates from Tinsa suggest 3-5% growth in established areas and 6-7% in emerging neighborhoods.
Medium-term forecasts through 2027 project a compound annual growth rate (CAGR) of 4.5-6% for new builds. This moderation from current explosive growth reflects expected increases in housing supply, potential interest rate stabilization, and affordability constraints reaching critical levels. However, continued economic growth and sustained foreign demand should prevent any significant price corrections.
Long-term prospects depend on several variables: successful infrastructure projects including expanded metro lines, the city's ability to attract tech companies and maintain its cultural renaissance, and government intervention in the housing market. The proposed high-speed rail connection to Madrid and continued airport expansion support bullish long-term scenarios.
Key risks include potential economic downturns affecting tourism, stricter regulations on foreign ownership, and the possibility that current price levels prove unsustainable for local incomes. However, Malaga's transformation from a seasonal tourist destination to a year-round economic hub, combined with its lifestyle advantages and limited developable land, suggests prices will continue their upward trajectory, albeit at more sustainable rates than the current boom.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Yes, property prices in Malaga are rising significantly and show no signs of slowing down. With annual increases of 17-20% and five-year growth of 57.4%, Malaga has become Spain's hottest property market outside Madrid.
The combination of robust economic growth (3.5% GDP), record tourism (14 million visitors), strong foreign investment (33% of transactions), and severe supply constraints creates perfect conditions for continued price appreciation. While growth may moderate to 4-8% annually through 2027, the fundamental drivers remain intact, making Malaga an attractive but increasingly expensive market for both investors and residents.
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
Sources
- Idealista - El metro cuadrado en Málaga supera en mayo los 3.400 euros por primera vez
- Indomio - Real estate market Málaga
- Terreta Spain - Investir immobilier Malaga 2025
- Sur in English - The housing rally accelerates: Malaga the second
- Guide to Malaga - Malaga Property Report March 2025
- Investropa - 7 statistics for the Malaga real estate market in 2025
- Alexander Carmine - Malaga Province Real Estate Market 2025
- SpotBlue - Spain Real Estate Market 2025 Investor Guide
- Skift - Spain's Malaga to Ban Short-Term Rentals in Over 40 Neighborhoods
- Jason Callow Homes - Property prices on the Costa del Sol this year