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What will happen in Málaga’s real estate market? Will prices go up or down? Is Málaga still a hotspot for foreign investors? How is Spain’s government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with notaries, real estate agents, and clients who buy properties in Málaga, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.
1) Rental yields in Malaga will rise as it becomes popular for short-term vacation rentals
In 2023, Malaga experienced a record-breaking influx of tourists, with 14 million visitors marking a 12% increase from the previous year. This surge in tourism significantly boosted the local economy, with an estimated impact of 19,137 million euros. Such a rise in tourist numbers naturally increases the demand for accommodations, particularly short-term vacation rentals, which are often preferred by travelers for their flexibility and home-like amenities.
The supply of short-term rental properties in Malaga saw a dramatic increase of 99% in just one year, with these rentals now making up 11% of the city's available housing. This trend is not only a response to the growing tourist demand but also a strategic move by property owners to circumvent housing law limitations and protect against defaulting tenants. The influx of digital nomads, who favor short-term stays, further fuels this demand, making short-term rentals a lucrative option for property owners.
Reports from the University of Malaga have shown a direct correlation between the growth of tourist housing and rising rental prices. For every 10% increase in tourist lets, rental prices have risen by an average of 3.29 euros per square meter. This indicates that as more properties are converted into short-term rentals, the overall rental market becomes more profitable, driving up yields for property owners.
Sources: Surin English, Surin English, Surin English
2) More foreign buyers in Malaga will diversify the types of properties available
The influx of foreign buyers in Malaga has been significant, with foreign investors making up 34.76% of all property transactions in the third quarter of 2024. This trend has positioned Malaga as a top destination for international real estate investment, second only to Alicante in Spain.
The diversity in the nationalities of these buyers, primarily British and German, brings a variety of preferences and tastes to the market. This diversity naturally leads to a demand for different types of properties, as each nationality may have distinct expectations and desires when it comes to their ideal home.
Developments like Be Grand El Limonar and Malaga Towers are prime examples of how the market is responding to these international tastes. These projects offer luxurious amenities and international architectural styles, catering to the high-end segment and reflecting the varied preferences of foreign buyers.
Sources: Sur in English, Sur in English, Lucas Fox, Le Figaro Properties
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Renovation of older properties in Malaga will increase due to new energy efficiency regulations
In Malaga, new energy efficiency regulations are set to spark a wave of renovations for older properties.
With 84.9% of homes in Spain needing upgrades to meet EU standards by 2033, Malaga homeowners are gearing up for changes. This isn't just a local issue; it's a nationwide push that will see many properties getting much-needed facelifts.
The Spanish government is backing this movement with the National Integrated Energy and Climate Plan 2021-2030. This plan offers financial incentives through the National Energy Efficiency Fund, making it easier for Malaga residents to afford these upgrades. It's a win-win, as homeowners can improve their properties while also saving on energy costs.
Upcoming regulations, like the Energy Performance of Buildings Directive, are also in play. By 2033, homes must have at least a D energy certification to be sold or rented. This requirement is pushing property owners in Malaga to act now, ensuring their homes meet these standards.
For those considering buying property in Malaga, this is a crucial time. The market is shifting towards energy efficiency, and properties that meet these new standards will likely be more attractive. It's not just about compliance; it's about future-proofing investments.
As these changes unfold, Malaga is poised to become a leader in energy-efficient living, setting an example for other regions. The combination of government support and regulatory pressure is creating a perfect storm for property renovations.
Sources: Iberian Property, Odyssee-Mure
4) Demand for co-living spaces in Malaga will grow as more young people embrace this trend
The real estate market in Málaga is being shaped by a growing trend towards co-living spaces, especially among younger residents. This shift is largely driven by the rising demand for affordable housing options among young professionals. In the past, specifically in 2023 and 2024, Málaga faced a significant shortage of affordable housing, with a need to introduce approximately 7,500 new units annually to meet demand, including co-living models.
Rental prices have surged, making traditional living arrangements less accessible. In 2023, rental prices increased by 10.1% in the province and 13.2% in the city, pushing many to seek more affordable and flexible housing solutions like co-living spaces. This trend is further supported by the supply and demand imbalance in Málaga's real estate market, which requires tripling the current rate of residential development to meet demand.
Moreover, surveys have shown that millennials and Gen Z prefer community-oriented living arrangements. Co-living spaces cater to these preferences by providing a social environment where residents can interact and form new friendships. This aligns with the lifestyle choices of younger generations, who value community and shared experiences.
Sources: Idealista, Iberian Property, Coliving.com
5) Demand for senior-friendly housing in Malaga will grow as the population ages
Malaga's aging population is a major driver for accessible and senior-friendly housing.
By 2037, the number of seniors over 65 in Malaga is expected to grow by almost 60%, reaching nearly half a million, with 130,000 of them over 80. This surge in the elderly population means more people will need homes that cater to their specific needs.
Life expectancy in Spain is on the rise, projected to hit 84.25 years by 2025. As people live longer, the demand for housing that adapts to their evolving needs becomes more pressing. Yet, Malaga faces a challenge with only 2.5 residential beds per 100 seniors, which is far below the WHO's recommendation of five beds per 100 seniors.
Real estate agents in Malaga are noticing a clear trend: there's a growing demand for homes that are comfortable and accessible for older adults. This is evident from the increasing number of inquiries about senior-friendly properties, highlighting the urgent need for more suitable housing options.
With the current shortage of senior-friendly housing, the market is ripe for development. The demand is not just about numbers; it's about creating spaces that offer comfort and care for the aging population.
As the population ages, the real estate market in Malaga is poised for a shift, with more focus on senior-friendly living solutions to meet the needs of its residents.
Sources: Ageing population means beds in residential homes for the elderly, Spain Life Expectancy 1950-2025, Senior Housing Industry Forecast: What to Expect in 2025 and Beyond
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6) Malaga’s rental prices will increase steadily as more international residents settle long-term
Rental prices in Malaga are expected to rise steadily as the city continues to attract more long-term international residents. This trend is driven by several key factors that have been observed over the past few years.
Firstly, there has been a significant increase in the number of international residents in Malaga. By 2024, the province had over 412,000 residents born outside of Spain, making it one of the top regions in the country for foreign residents. This influx of people from abroad has naturally led to a higher demand for rental properties, as many of these new residents prefer renting over buying when they first arrive.
Additionally, Malaga has become a popular destination for digital nomads and remote workers. These professionals are drawn to the city by its mild climate, rich culture, and improving infrastructure. As they seek stable, long-term accommodations, the demand for rental properties continues to grow. This is further compounded by the city's efforts to improve infrastructure and amenities, making it an even more attractive place to live.
Moreover, the real estate market in Malaga has been experiencing a shortfall in available properties despite ongoing development efforts. This shortage, combined with the rising demand, suggests that rental prices will continue to increase. Real estate market reports have also shown a decrease in the availability of rental properties, which supports the argument that prices will keep rising as demand outpaces supply.
Sources: Sur in English, Euronews, Sun Properties Marbella
7) Property prices in northern Malaga will drop as younger people move to the coast
In recent years, particularly in 2023 and 2024, there has been a noticeable trend of younger populations moving towards the coastal areas of Malaga. This shift is largely driven by the vibrant lifestyle and amenities that coastal regions offer, which are highly attractive to younger residents.
Real estate market reports have highlighted a decrease in demand for properties in the northern districts of Malaga. As younger populations gravitate towards the coast, the demand for properties in these areas has increased, leading to a rise in property prices there. Conversely, this shift in focus has resulted in a potential decline in property values in the northern districts.
Economic data supports this trend, showing that coastal areas in Malaga have seen increased job opportunities, particularly in sectors like tourism, technology, and education. These opportunities make coastal living more appealing to younger residents, further encouraging the migration towards these areas.
Transportation and infrastructure developments have also played a role in enhancing the appeal of coastal living. Improved connectivity and access to amenities have made coastal areas more desirable, reinforcing the trend of younger populations moving away from the northern districts.
Sources: Moving to Malaga, Dream Properties International, Right Casa
8) Demand for smart homes in Malaga will grow as more young, tech-savvy residents move in
In recent years, Malaga has experienced a notable demographic shift, with a growing number of younger, tech-savvy individuals choosing to reside in the city. This trend is largely driven by the increasing urban population in Spain, which reached 81.6% in 2023. As more people opt for urban living, the demand for modern housing solutions, such as smart homes, naturally rises.
Malaga's transformation into a tech hub has further fueled this demand. The city has attracted significant investment from major tech companies like Google, Vodafone, and Telefonica, as well as numerous startups. This influx of tech companies has created a vibrant ecosystem supported by institutions like the University of Malaga and Malaga Tech Park, often referred to as the "Spanish Silicon Valley." As a result, the city has become a magnet for young professionals who are keen on integrating technology into their daily lives.
The preferences of these younger residents are reflected in the rapid growth of the smart home market in Spain. In 2023, the market was valued at USD 3.26 billion and is projected to reach USD 12.86 billion by 2030. This growth is driven by the increasing adoption of smart devices among tech-savvy individuals who prioritize convenience, efficiency, and connectivity in their homes.
Moreover, government initiatives like the 'Digital Spain Agenda 2026' are promoting digital infrastructure and smart city projects, further supporting the expansion of the smart home industry. These initiatives encourage both consumers and businesses to invest in connected devices and automation technologies, aligning with the lifestyle preferences of younger residents.
Sources: NextMSC, Horasis, Mordor Intelligence
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Demand for high-yield properties in Malaga will rise as investors look beyond traditional financial markets
The demand for high-yield properties in Malaga is on the rise as investors search for alternatives to traditional financial markets.
In Malaga, property prices have been climbing steadily, fueled by high demand and limited housing supply. This trend is expected to persist into 2025, with prices projected to increase by 3% to 7% compared to 2024. Malaga's charm as a tourist hotspot and its prime location on the Costa del Sol are major drivers of this growth.
The rental market in Malaga is booming, thanks to the influx of digital nomads and remote workers. This has resulted in higher rental yields than many other European cities, making Malaga a magnet for investors chasing high returns. The city's vibrant tourism scene, enriched by a cultural renaissance and excellent transport links, keeps drawing visitors, further boosting short-term rental demand.
With traditional financial market returns dwindling, investors are diversifying their portfolios, and real estate is becoming a favored choice. This is especially true for international investors eyeing Spanish real estate. The stability of Spain's economy and the high quality of life in the Costa del Sol region make it an attractive investment destination.
Malaga's appeal is not just about numbers; it's about lifestyle. The city offers a unique blend of modern amenities and historical charm, making it a desirable place to live and invest. The local government's efforts to improve infrastructure and public services further enhance its attractiveness.
As more people discover Malaga's potential, the demand for properties is likely to keep growing. Investors are keen to capitalize on the city's upward trajectory, seeing it as a promising opportunity in an uncertain global market.
Sources: Travel and Tour World, InSpain News, Asset Folio
10) Malaga’s property prices will rise moderately as it becomes popular with digital nomads
In recent years, Malaga has become increasingly popular among digital nomads, and this trend is expected to continue. The city's appeal lies in its favorable climate, rich culture, and high quality of life, which have attracted a significant number of remote workers to Spain. This growing interest is driving demand for housing and coworking spaces in Malaga.
The demand for coworking spaces in Malaga has been on the rise, reflecting the influx of remote workers and startups. This indicates a strong interest in the city as a hub for digital nomads. Additionally, the WorkBay initiative launched by Malaga aims to attract remote workers and businesses, further supporting the city's tourism and hospitality ecosystem.
Malaga's real estate market has also seen a significant increase in property sales to foreign buyers, driven by the city's growing reputation as a desirable destination. Reports of rising rental prices in Malaga further support the notion that the real estate market will experience a moderate price increase. Surveys indicate that digital nomads prefer cities with good weather and a high quality of life, making Malaga an attractive choice for remote workers.
Sources: Sun Properties Marbella, Smart Tourism Capital, Kotilista
11) More foreign retirees will buy homes in Malaga, increasing demand in quieter suburban areas
Malaga is a top destination for foreign retirees looking to buy property.
In 2024, nearly 31% of homes in Malaga were purchased by foreigners, making it the fourth most popular province in Spain for international buyers. This surge is largely due to retirees who are drawn to the area's warm climate and excellent quality of life.
With Europe's aging population, many are seeking sunnier locales, and Malaga's weather, vibrant culture, and delicious cuisine make it a prime choice. Plus, Malaga offers a lower cost of living compared to many European cities, which is a big plus for those on a fixed income.
Another major attraction is Malaga's healthcare system, which provides both public and private options with high standards of care. This is particularly appealing to retirees who prioritize health and wellness.
There's also a noticeable shift in interest towards quieter, suburban areas like Teatinos and El Palo. These neighborhoods offer a more relaxed lifestyle, which is becoming increasingly popular among retirees.
As more foreign retirees settle in Malaga, demand for properties in these peaceful areas is expected to rise, further boosting the local real estate market.
Sources: Sur in English, Malaga Expat, Sur in English, Vamos Spanish
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12) Property values in eastern Malaga will rise significantly due to their closeness to new tech hubs
The eastern neighborhoods of Malaga are on the brink of a property value boom thanks to their closeness to emerging tech hubs.
Malaga is quickly becoming a tech hotspot, with big names like Google setting up a cybersecurity center in the city. This tech growth is a major factor in the rising property values. Google and Vodafone are among the tech giants planning to open offices here, which means more tech professionals will be moving in, boosting housing demand.
The local government is sweetening the deal for tech companies with incentives to settle in Malaga, which is further fueling the tech industry and, by extension, the property market. Improved transportation, like high-speed trains, makes commuting a breeze, adding to the appeal of living in eastern Malaga.
As these tech companies set up shop, the eastern neighborhoods are becoming prime real estate. The influx of tech workers is expected to drive up property values as they look for homes close to their new workplaces.
With the tech industry booming, the demand for housing in these areas is set to rise. Eastern Malaga is becoming a sought-after location for tech professionals, making it a smart choice for property investment.
Investors are eyeing these neighborhoods, anticipating that the tech-driven demand will continue to push property values higher. The combination of tech growth and improved infrastructure is a game-changer for the local real estate market.
Sources: Guide to Malaga, Sur in English, Invest in Spain
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.