Buying a property in Malaga: a complete guide

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Yes, the analysis of Malaga's property market is included in our pack

Thinking of buying real estate in Malaga? You're not alone!

Many people are enchanted by Malaga's coastal allure and dream of owning a beachfront property or a stylish apartment in this city.

Would it be a good investment, though? Are property prices increasing in Malaga? What is the current trend? Is it better to invest in the city center or Malagueta? And the taxes? What rental yields should I expect?

We've got it all sorted. No worries.

The Investropa team has extensively researched this market. As a matter of fact, we have condensed all our findings in a pack. Get it now.

In the lines below, we'll share useful information and some practical tips.

How is the property market in Malaga?

Is the property market in a good shape or a challenging one? Data will tell us the story.

Property types

In Malaga, there are various types of properties available for sale to suit different preferences and needs.

These include apartments, perfect for individuals or small families seeking a cozy and low-maintenance living space. For larger families or those who desire more space, townhouses and villas are an excellent option, offering more room and often including private gardens or pools.

Additionally, for investors or those looking for commercial opportunities, there are also commercial properties and business spaces for sale.

Whether you seek a tranquil beachside retreat, a vibrant city apartment, or a business venture, Malaga offers a diverse range of properties to cater to every buyer's requirements.

Buying or renting?

(If you're purchasing for personal use and not for renting)

Whether you've already made Malaga your home or are contemplating it for the future, you might be wondering about the advantages of buying a property versus renting in this Spanish coastal city.

Generally, buying is a better choice than renting in Malaga due to its desirable climate and high rental prices.

However, should flexibility be your priority, renting is the best option.

Property prices in Malaga

On average, according to the last data from Ministerio de Fomento, purchasing a property in Malaga would cost you around $5,800 per square meter.

Naturally, prices are quite spread out. An apartment in Malaga city center might have a different price per square meter than a house in Marbella. We actually give you a more detailed breakdown in our pack for buying property in Malaga and in Spain.

To put things in perspective, it is 3.3 times less than the property prices in the center of New York.

Also, it's worth noting that housing prices in Malaga are cheaper (-32%) than in Ibiza.

The most expensive neighbourhoods in Malaga are probably El Limonar, El Candado, El Palo, and El Pedregalejo, while the cheapest are likely Churriana, Campanillas, and La Mosca.

Trends

First and foremost, we have to acknowledge that Spain offers, today, a lot of stability to investors. The last Fragile State Index that has been reported for this place is 44.4.

This is important to remember when wondering if it's a good investment to buy a property in Malaga.

Also, according to the International Monetary Fund (IMF), Spain's economy is expected to soar by 8.4% in the coming 5 years, resulting in an average GDP growth rate of 1.7%.

If you intend to invest in real estate in Malaga it's a good thing because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.

Also, in Spain, the average GDP per capita has changed by -1.1% over the last 5 years. It's a bit concerning.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Spain right now.

Buying property in Malaga

Buying real estate in Malaga can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Malaga and in Spain.

Buying process

Inside our pack, we've outlined the complete buying process, including a detailed breakdown of prices and yields per area, tips for negotiating the price, and information about mortgage options.

Here, we're presenting you with a more straightforward version.

This is the step-by-step process to purchase a property in Malaga:

1. Determine your budget and property preferences.
2. Research the Malaga real estate market for suitable properties.
3. Engage a reputable local real estate agent familiar with the area.
4. Visit and inspect shortlisted properties in Malaga.
5. Conduct due diligence, including checking the Registro de la Propiedad for property history.
6. Appoint a solicitor specialized in Spanish property law to review all legal aspects.
7. Negotiate the purchase price and terms with the seller, and sign a pre-purchase agreement (contrato de arras).
8. Obtain your foreigner's identification number (NIE) from the Spanish authorities.
9. Sign the official purchase contract (escritura) before a notary in Malaga.
10. Pay the outstanding balance and associated taxes, such as Transfer Tax (Impuesto de Transmisiones Patrimoniales).
11. Register the property in the Land Registry (Registro de la Propiedad) under your name.
12. Finally, obtain the title deed (escritura pública) as proof of ownership in Malaga.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Spain.

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Where to find a property

Searching for properties in Malaga? Check out these websites:

• Idealista - A real estate platform in Spain offering properties for sale and rent, holiday homes, mortgage services, and property-related resources.
• Fotocasa - A property portal that provides homes for sale and rent across various cities in Spain, along with mortgage and insurance services.
• Habitaclia - A real estate platform with properties for sale, rent, and new builds in different regions of Spain.
• Pisos - A real estate portal in Spain offering properties for sale and rent, including houses, flats, commercial spaces, and more.
• YaEncontre - A real estate portal providing a wide range of properties for sale and rent across various regions in Spain.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Spain.

Which properties for which budget?

As mentioned before, the average price per sqm in Malaga is $5,800. A 1-bedroom property with 60 square meters of space would cost approximately $348,000, and a 2-bedroom with 85 square meters of space would cost approximately $493,000.

Obviously, property prices will change based on both the property itself and its location.

Typically, prices are higher in the best areas of Malaga. For about $1,410,000, you could get a villa in Málaga Este, but a property in Los Monteros could be priced at $620,000.

Nevertheless, there are spots that are more accommodating to your wallet. You may find a property in Bailén-Miraflores for $450,000, or you might discover a house in Palma-Palmilla priced at only $370,000.

Find a more detailed breakdown in our full pack for buying property in Spain.

Risks and pitfalls

Here are the main pitfalls specific to buying a property in Malaga, Spain:

• "Cédula de habitabilidad" absence: Missing habitability certificate, required for legal occupation.
• "Honorarios" confusion: Ambiguity over who pays the real estate agent's commission.
• Coastal restrictions: Strict regulations near the coast limit property modifications and usage.
• "Obras menores" limitations: Complex permit process for minor property renovations.
• "Patrimonio" tax: Potential liability for wealth tax on high-value properties.
• "Inmatriculación" issues: Disputes regarding the authenticity of unregistered properties.
• Tourist rental restrictions: Regulations on short-term rentals affecting property income.
• Historical property challenges: Preservation rules can hinder modifications to protected buildings.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Spain Property Pack

Living in Malaga

Living in Malaga is a great experience, with plenty of sunshine, beautiful beaches, and a vibrant culture to enjoy.

Cost of living

The cost of living in Malaga is generally lower than in other Spanish cities, and it is possible to live comfortably on a budget. Prices for rent, utilities, food and entertainment are all relatively affordable.

Here are some examples to better understand the cost of living in Malaga:

• A "tinto de verano" (Spanish wine-based drink) at a beachfront chiringuito: $2.50.
• Rent for a one-bedroom apartment in the historic center of Malaga: $900 per month.
• "Pescado frito" (fried fish) meal in the Pedregalejo neighborhood: $15.
• A "café bombón" (espresso with condensed milk) at a local café: $1.80.
• Groceries from the "Mercado Central de Atarazanas": $35 per week for one person.
• Ticket to the Picasso Museum: $10.
• Monthly membership at a local "Polideportivo" (sports center): $40-$60.
• A bottle of "Malaga Virgen" sweet wine: $8.

Neighbourhoods

Since we aim to provide information in a clear and reader-friendly way, we've created a summary table outlining the different neighborhoods in Malaga. For yields, prices and rents, check our property pack.

Life in Malaga

Malaga is a major economic center in the region of Andalusia, with a strong focus on tourism, commerce, and services. It is home to a number of large companies, and its port is one of the busiest in the Mediterranean.

What expats usually like the most in Malaga is the mix of modern and traditional culture, as well as the mild weather and stunning beaches. They also appreciate the wide range of activities and attractions available, such as the Picasso Museum and the Alcazaba fortress.

Regarding safety, the crime rate of Malaga is around 29, which is a really good score. Most crimes are minor crimes.

A good point for a property investor - Malaga has a modern mass rapid transit system called Metro de Málaga.

Access to healthcare in Malaga is very good, with a Healthcare Index of 70. A strong healthcare setup always reflects positively on real estate.

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Renting out in Malaga

This section is for you if your goal is to buy a property and rent it out to generate income.

Long-term

Tenant Profiles in Malaga

According to the data reported by Wikipedia, the home ownership rate in Spain is 76%, which is average.

It means that, if you decide to buy and rent out in Malaga, there will be a good number of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target young professionals, students, and retirees. For short-term tenants, tourists and business travelers are the main target audience.

Here is a little summary table we've made for you.

Rental yields

Nowadays, rental yields in Malaga are usually below 5%. It's not much. A good rental yield is usually around 7% or higher. Maybe, you knew it already.

Apartments in the city centre of Malaga tend to give the best rental yields due to the high demand from tourists and young professionals looking for short-term rentals. Houses located in the more suburban areas of Malaga tend to be more attractive to families looking for long-term rentals, offering steady rental yields over time.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Finally, be aware that rental incomes in Malaga are taxed at 19%, which is rather good.

Short-term

You could also decide to rent short-term to tourists visiting Malaga for sightseeing or business travelers looking for a convenient place to stay while in the city. Additionally, you could rent to students attending a university in Malaga for a semester or year.

If you decide to go with that option, look for properties in the historic centre of Malaga, specifically in the areas of Calle Larios and El Palo. Additionally, the beachfront areas such as La Caleta and El Palo are also great for short-term rentals.

Currently, there are approximately 8,000 active Airbnb listings in Malaga, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $116.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Malaga can make around $2100 per month. Also, the average occupancy rate is estimated at 77%.

Is it worth buying real estate in Malaga then?

Absolutely, buying a property in Malaga is a fantastic idea if you're seeking an investment with the potential for growth. The property market in Malaga has displayed stability and a promising future. With Spain's expected economic growth and a surge in housing costs, investing in Malaga real estate can be a lucrative opportunity.

The city's diverse property options, from cozy apartments to spacious villas, cater to various needs, whether it's a dream home, a retirement plan, or a rental income source. The potential for good rental yields, especially in the city center, makes it attractive for those looking to generate income from their investment.

Malaga's pleasant climate, stunning beaches, rich culture, and blend of modern and traditional charm further enhance its appeal as a destination for both tourists and expats. The cost of living is relatively affordable, making it accessible to a wide range of buyers.

However, it's not the right move for everyone. If flexibility is your top priority, renting might be a better choice, as buying commits you to a specific location. Budget constraints can also be a limiting factor, as even though Malaga's prices are reasonable compared to some major cities, they might still be out of reach for those with limited finances.

Moreover, there are risks and pitfalls, including legal and tax issues, coastal restrictions, and potential wealth tax liabilities, which could catch unwary buyers off guard. Additionally, while certain property types and locations offer attractive rental yields, they may not meet the expectations of investors seeking higher returns.

Finally, the real estate market can be unpredictable, so those considering a purchase should carefully weigh their risk tolerance and long-term commitment, as market conditions can change. In sum, buying property in Malaga can be a brilliant move for investors seeking a prosperous opportunity, a beautiful place to reside, or a rental income stream, but it's not a one-size-fits-all solution, and individuals should assess their goals, budget, and risk tolerance before making the leap into this promising market.

Make sure you understand the real estate market in Malaga

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.