Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of Malaga's property market is included in our pack
What is happening in Málaga’s real estate market? Are prices going up or down? Is Málaga still a hotspot for foreign investors? How is Spain’s government impacting real estate policies and taxes in 2025?
These are the questions everyone is asking us every day—professionals, buyers, and sellers alike, from the historic center to the vibrant coastal areas and beyond. Perhaps you’re wondering the same thing.
We know this because we stay deeply connected with local professionals and people like you, diving into the Málaga real estate market every single day. That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market trends and dynamics.
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) Coastal areas will maintain stable yields by attracting tourists and long-term renters
Coastal areas like Malaga are seeing stable property yields thanks to a mix of rising property prices and strong demand.
In March 2024, property prices in Malaga city hit €2,759 per square meter, showing a steady climb. This trend isn't just in Malaga; places like Fuengirola and Benalmádena are also experiencing similar price hikes, making them hot spots for real estate investment.
Malaga's charm isn't just in its properties. A record 14 million tourists visited last year, boosting the local economy significantly. This influx has pushed tourism revenues to a whopping €19,137 million euros, with short-term rentals thriving as a result.
Long-term rentals are also on the rise. Since April 2023, rental rates in Malaga have jumped by 14.4%. This demand is keeping rental yields stable, with some areas even seeing higher returns, according to real estate agencies.
The Tinsa Q1 2024 report highlights that Malaga city has seen a 6.9% CAGR return over five years. Some neighborhoods are doing even better, making them attractive for investors looking for solid returns.
With its mix of tourist appeal and rising rental demand, Malaga continues to be a magnet for both tourists and long-term renters. This dynamic ensures that property yields remain stable, making it a promising area for investment.
Sources: Guide to Malaga, Kotilista, Nolab
2) Rental yields in Malaga will improve with rising short-term rental demand
The yield on rental properties in Malaga is set to improve as short-term rental demand increases, thanks to the city's booming tourism sector.
In 2023, Malaga experienced a remarkable surge in tourism, welcoming 1,040,000 visitors in the first quarter alone, which is a 25% jump from the previous year. This influx of tourists naturally boosts the demand for short-term rentals, making it a hot spot for property investors.
Short-term rentals in Malaga are thriving, with a typical listing being booked for 310 nights a year and enjoying a median occupancy rate of 85% during 2023-2024. The average daily rate (ADR) for these rentals was €98 in 2023, with some properties fetching up to €115, highlighting the lucrative nature of this market.
By September 2024, the number of active Airbnb listings in Malaga had climbed to 7,725, showcasing the growing interest in short-term rental investments. Malaga's strategic location, enhanced tourism infrastructure, and rich cultural offerings continue to draw visitors, further boosting potential rental yields.
For property owners, these strong performance metrics indicate that short-term rentals are becoming increasingly profitable. The city's appeal is not just in its sunny beaches but also in its vibrant cultural scene, which keeps tourists coming back and ensures high occupancy rates.
Investors are keenly eyeing Malaga, recognizing the city's potential for high returns. With tourism on the rise and a steady stream of visitors, the short-term rental market in Malaga is poised for continued growth.
Sources: Airbtics, CG Capital Europe, Your Rentals
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) Property values in Malaga's coastal areas will increase as they gain popularity for remote work setups
The coastal areas of Malaga have become increasingly popular for remote work setups, leading to a rise in property values. In 2023 and 2024, there was a noticeable increase in demand for coastal properties in Malaga. For instance, the average price per square meter in Malaga city rose by 17.2% from March 2023 to April 2024, reaching €2,833. This trend reflects a growing interest in the area, particularly among remote workers.
Remote workers are drawn to Malaga for its excellent infrastructure and vibrant expat communities. The Costa del Sol property market, which includes Malaga, has seen a surge in interest from digital nomads. This is partly due to the availability of world-class amenities and the Mediterranean lifestyle that the coastal location offers. Additionally, Malaga city has the highest number of holiday lets in Spain, with 6,550, indicating strong demand for short-term rentals that cater to remote workers and tourists alike.
The growth in coworking spaces and remote work-friendly amenities in Malaga further supports this trend. Facilities like The Living Room Coworking and Regus provide modern amenities and comfortable work environments, making Malaga an attractive option for remote workers. Moreover, the rental market in Malaga city has experienced significant growth, with rental rates increasing by 14.4% since April 2023. This rise in rental rates is a clear indicator of the growing demand for properties in the area.
Sources: Guide to Malaga, Asset Folio
4) Coastal erosion worries will affect property values in some beachfront areas of Malaga
Coastal erosion is a significant concern for property values in certain beachfront areas of Malaga. Over the years, the Arraijanal-San Julián coast has experienced substantial erosion, with some areas losing up to 5 meters of beach per year between 2016 and 2022. This ongoing erosion problem indicates a persistent threat to the region's coastline.
Scientific studies have shown that climate change is a major factor contributing to this erosion. Rising sea levels and more frequent storms have led to a "serious regression" of the shoreline, as declared by the General Directorate of the Coast and the Sea. This means that the natural recovery of these beaches is unlikely, and the situation may worsen in the future.
Despite the increase in property values driven by tourism, the threat of coastal erosion can negatively impact these values. Historical events, such as the near disappearance of La Malagueta beach due to urban development, have shown that erosion can lead to a decline in property values. Additionally, the risk of increased insurance premiums due to severe flooding and erosion-related losses further complicates the property market in these areas.
Sources: The Olive Press, Euronews, Business Insurance
5) City center rental market will dip slightly as more properties shift to short-term rentals
In recent years, particularly in 2023 and 2024, Malaga has seen a significant increase in the number of properties listed on short-term rental platforms. This trend is evident from the rise in listings from 7,930 to over 9,300 within a year. Such a shift indicates that more property owners are opting for short-term rentals over long-term leases.
Local real estate agencies have reported a noticeable preference among property owners for short-term rentals. This preference is largely driven by the higher profitability associated with short-term rentals, as evidenced by the increase in the average daily rate and occupancy rate in 2024. The financial incentives make short-term rentals more attractive to property owners.
Furthermore, surveys of property owners reveal a growing inclination towards short-term rental income, fueled by the surge in demand from tourists and digital nomads. This demand has led to a shortage of long-term rental options, making it difficult for residents to find affordable housing in the city center.
Local government statistics and policy changes also reflect this trend. The city council's decision to ban new short-term rentals in 43 neighborhoods is a response to the overwhelming presence of short-term accommodations, which exceed 8% of homes in these areas. This regulatory action highlights the impact of short-term rentals on the local housing market.
Sources: Skift, Sur in English, Travel and Tour World
Get fresh and reliable information about the market in Malaga
Don't base significant investment decisions on outdated data. Get updated and accurate information with our guide.
6) New short-term rental rules will affect the profitability of Airbnb-style investments in Malaga
Changes in short-term rental regulations in Malaga are set to significantly impact the profitability of Airbnb-style investments. In November 2024, Malaga implemented a ban on short-term rentals in 43 neighborhoods where such rentals exceeded 8% of homes. This move mirrors similar actions taken in cities like Barcelona, aiming to last up to five years.
Before the ban, Malaga's short-term rental market was thriving. In 2023, hosts typically earned €28,000 annually, with a high occupancy rate of 85% and an average daily rate of €98. However, with the new regulations, profitability is expected to decline. Experts like Bram Gallagher from AirDNA have noted that these restrictions will likely push demand to other parts of Spain, potentially increasing occupancy and rates in those areas.
Property owners in Malaga have expressed concerns about the city's strict enforcement of these regulations. Non-compliance can lead to fines, restrictions on rental activity, and even license revocation, making it clear that operating an unlicensed short-term rental is not worth the financial and legal risks. This strict enforcement is expected to deter some investors from continuing or starting short-term rental operations in the affected areas.
Sources: Skift, Airbtics, BNB Calc
7) City center yields will dip slightly due to rising purchase prices and increased competition
In recent years, the property market in Malaga city center has experienced significant changes. One of the most notable trends has been the rise in property prices. For instance, in the year leading up to the first quarter of 2024, the average price per square meter increased by 13.8%, reaching €2,801. This upward trend continued into the last quarter of 2024, with prices rising by 4.6% to €2,678 per square meter. These increases in purchase prices are a key factor in the potential decline of yields.
Another important aspect to consider is the increased competition among buyers. The demand for properties in central Malaga has been strong, with a 24.55% increase in local sales in 2023 compared to the pre-pandemic year of 2019. This surge in demand is driven by both domestic and international buyers, attracted by Malaga's cultural and coastal appeal, as well as its growing technology and startup ecosystem. Real estate agencies have reported this heightened competition, which can lead to higher purchase prices and, consequently, lower yields.
Additionally, while rental rates in Malaga city have increased by 14.4% since April 2023, the average rent per square meter was €14.20 in May 2024. This growth in rental prices may not keep pace with the rapid increase in purchase prices, further contributing to the potential decline in yields. The combination of rising property prices and increased competition among buyers suggests that yields in the city center might decline slightly.
Sources: Guide to Malaga, Sur in English, Panorama Marbella
8) High-end property demand in Malaga will increase, driving up luxury segment prices
The demand for high-end properties in Málaga is on the rise, and this trend is expected to push prices up in the luxury segment.
Why is Málaga becoming a hotspot for luxury real estate? Well, it's all about the influx of high-net-worth individuals from places like Northern Europe and the Middle East. They're drawn to Málaga's blend of luxurious lifestyle and top-notch amenities, making it a prime choice for their next investment.
Foreign investment is another big player here. In 2023, 38.7% of property purchases in Málaga Province were by international buyers, with the British leading the charge. This trend didn't slow down in 2024, as international buyers still made up 14.85% of property purchases in the third quarter. Such a steady stream of foreign interest is a major boost for the luxury market.
Tourism is also a key factor. In 2024, the Costa del Sol's hotels boasted impressive occupancy rates, signaling a booming tourism scene. This surge in visitors often translates to more international buyers eyeing luxury properties, eager to own a piece of this vibrant locale.
Adding to the allure, Málaga is continuously enhancing its high-end amenities and infrastructure. These developments make the city even more appealing to affluent buyers looking for a blend of comfort and sophistication.
Sources: Savills, Panorama Marbella, Kotilista
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) Malaga will see rising demand for retirement-friendly properties due to its aging population
The aging population in Malaga is driving up demand for retirement-friendly properties.
By 2037, Malaga will see nearly half a million seniors, with 130,000 of them over 80 years old. This surge is due to people living longer, as life expectancy in Spain hit 84.25 years in 2025. Many of these seniors are eyeing homes that cater to their retirement needs.
There's a growing need for care homes and residential places, but Malaga is falling short. The World Health Organization suggests five beds per 100 inhabitants over 65, yet Malaga only offers 2.5 beds. This gap highlights the urgent need for more retirement-friendly infrastructure.
Real estate in Malaga is buzzing, especially for properties with accessibility features. High demand and limited supply are pushing property prices up, particularly for homes with outdoor spaces, tech-smart features, and energy efficiency, which retirees love.
Malaga's charm isn't just in its sunny beaches; it's also a hotspot for retirees seeking a vibrant yet relaxed lifestyle. The city is adapting, but the pace needs to quicken to meet the needs of its aging residents.
As more seniors flock to Malaga, the real estate market is poised for a shift. Developers are focusing on creating spaces that are not just homes but communities for retirees, complete with amenities that cater to their lifestyle.
Sources: Macrotrends, Sur in English, The Olive Press
10) Malaga's luxury market will see rising prices as foreign buyers increasingly target this segment
In recent years, Malaga has become a hotspot for foreign buyers interested in luxury real estate. Back in 2023, foreign buyers made up a whopping 81% of total sales at the Lucas Fox Malaga office, with the UK and the Netherlands leading the charge. This trend has only grown stronger, with more international interest driving up demand and prices in the luxury segment.
The luxury real estate market in areas like Marbella, part of Malaga, has seen a significant boom. For instance, in the first quarter of 2024, luxury property sales in Marbella increased by 19.47% compared to the same period in 2019. This surge in demand is mirrored in the Costa del Sol's Golden Triangle, where luxury property sales reached 8,243 in 2023, marking a 24.55% increase from 2019.
Price hikes have been notable too. Between June 2023 and 2024, property prices in Marbella rose by 13.7%, with prime villas and beachfront flats fetching premium prices. In Malaga, the average price of new multi-family housing was 18% higher than in 2022, reflecting the growing demand and limited supply.
Sources: Idealista, Idealista, Real Assets
11) Malaga rents will rise as it gains popularity among international students
Rents in Malaga are set to rise as the city becomes a hotspot for international students.
The University of Malaga is seeing a boom in student numbers, with 36,054 students enrolled in recent years. This influx includes a significant portion of international students, all of whom need places to live. Naturally, this growing student body is putting pressure on the housing market.
While student residences are expanding, with 3,225 beds available and 600 more on the way, it's still not enough. The demand for rental housing, especially in areas with good transport links, is outpacing supply. This imbalance is likely to push rents higher as more students and young professionals compete for limited spaces.
Looking at other cities like Palma de Mallorca and Alicante, we see a pattern: international student influxes have historically led to rent increases. Students from abroad often have the means to pay more for quality housing, which can drive prices up even further.
Malaga is gaining a reputation as an educational hub, drawing in more international students each year. This trend is highlighted in media reports, which note the city's growing appeal and the resulting pressure on housing.
Sources: Edurank, Sur in English, Sur in English
Don't buy the wrong property, in the wrong area of Malaga
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
12) Demand for international schools and family-friendly neighborhoods will rise with the growing expatriate community
The growing expatriate community in Malaga is significantly influencing the demand for international schools and family-friendly neighborhoods. In 2024, a substantial 23.25% of Malaga's residents were born abroad, with 97% of new residents in the province being foreign-born. This trend is expected to continue, with projections indicating that by 2034, 92% of new residents will be expatriates.
As more expatriate families move to Malaga, there is a noticeable increase in the enrollment of international schools. For example, The British School of Málaga has a diverse student body with over 40 nationalities, reflecting the growing demand for international education. Expatriate families often prefer schools offering globally recognized curricula, such as the IGCSE and A-Levels, which are available at these schools.
Additionally, the demographic shift towards more foreign residents with children is driving the demand for family-friendly neighborhoods. Real estate market reports highlight increased interest in areas like Marbella, where families seek suitable living conditions. This demand is further supported by local government initiatives and urban development plans focusing on family-oriented amenities.
Sources: Sur in English, International Schools Database, InSpain News
13) Luxury developments will see rent hikes as they draw more affluent international tenants
The rental market in Malaga is buzzing, with luxury rentals seeing a significant demand spike.
Since April 2023, the average rent per square meter in Malaga city has jumped by 14.4%, hitting €14.20 by May 2024. This rise highlights the growing interest in upscale living spaces.
What's driving this trend? A big factor is the influx of international expatriates. In just the first quarter of 2024, 3,226 new residents moved to Malaga, mostly due to immigration. This makes Malaga a top spot in Spain for population growth, pushing up the demand for luxury rentals.
Malaga is also attracting high-net-worth individuals, which is another reason for the rising demand. The province saw a 6% increase in per capita income in 2022, making it the wealthiest in Andalusia. This economic boost draws affluent tenants ready to pay top dollar for premium accommodations.
With its sunny climate and vibrant culture, Malaga is becoming a hotspot for those seeking a luxurious lifestyle. The city’s appeal to wealthy international tenants is undeniable, and rents in luxury developments are expected to climb as a result.
As more affluent international tenants flock to Malaga, the city is poised to see a continued rise in luxury rental prices, making it a prime location for property investment.
Sources: Guide to Malaga, Sur in English, Sur in English
14) Tax incentives for energy-efficient homes will boost demand for sustainable properties in Malaga
In Malaga, new tax incentives are boosting the demand for sustainable homes.
The enhanced Section 45L Tax Credit is a game-changer, offering up to $5,000 for homes that meet Zero Energy Ready Home standards. This makes it financially appealing for builders to focus on energy-efficient construction. Malaga's City Council is also pushing for sustainability, achieving a 25% reduction in energy savings and a 20% cut in CO2 emissions, setting a benchmark for eco-friendly living.
In Costa del Sol, there's a noticeable shift as more buyers are looking for homes with solar power systems and low-carbon materials. This trend is expected to grow through 2025, as people become more conscious of environmental issues. The local government's efforts are clearly paying off, making sustainable living not just a choice but a lifestyle.
Green mortgages are now more accessible, thanks to major Spanish banks. This financial support makes it easier for buyers to invest in eco-friendly properties. Combined with government campaigns promoting energy efficiency, these factors are driving the demand for sustainable homes even higher.
For those considering a move to Malaga, these incentives and financial options make it an ideal time to invest in a sustainable property. The city's commitment to environmental sustainability is evident, and the benefits of living in an energy-efficient home are becoming increasingly attractive to potential buyers.
Sources: Building Innovation Hub, Malaga Smart Tourism, Zero Consulting, Asset Folio
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.
15) Asian investors will increasingly target Malaga’s real estate market for diversification opportunities
Asian investors are increasingly looking to diversify their portfolios, and Malaga's real estate market is becoming an attractive option. In the past, Asian investors have shown a cautious approach to European markets, but recent interest rate cuts by the ECB and Bank of England have encouraged more confidence among Asia Pacific investors. This shift in the economic landscape has opened up new opportunities for investment in regions like Malaga.
Malaga's strategic location and international airport make it easily accessible, which is a significant draw for Asian investors. Although specific flight data isn't provided, the city's connectivity to numerous European cities facilitates the arrival of tourists and foreign residents, including those from Asia. This accessibility is crucial for investors who are considering long-term commitments in the region.
The surge in tourism from Asian countries, particularly China, to Malaga is another indicator of growing interest. Between January and September 2024, Chinese tourist stays in Andalusia increased by 115%, highlighting the region's appeal. This rise in tourism not only boosts the local economy but also signals potential for real estate investments as more Asian visitors become familiar with the area.
Malaga has been recognized as an emerging real estate hotspot, with media coverage highlighting its dynamic and attractive qualities. The city's economic stability, coupled with a significant disparity between demand and supply for housing, hotels, offices, and logistics, makes it a promising destination for investors. This recognition further solidifies Malaga's position as a viable option for Asian investors seeking diversification.
Sources: Planeta Casa, Asia Real Estate Summit, Sur in English, Agent 4 Stars
16) Young professionals will move to Malaga for tech job opportunities
In recent years, Málaga has become a magnet for young professionals, especially those in the tech sector. The city has seen a significant increase in the number of tech companies establishing offices there, with Málaga TechPark now hosting 630 companies, including 60 international ones. This growth has created over 20,000 jobs, contributing significantly to the region's economy.
Notably, Google's cybersecurity centre, which opened in November 2023, is a key addition, drawing experts to develop tools against cyber threats. This presence of large companies like Google, Vodafone, and Citigroup has led to a surge in job postings, making Málaga an attractive destination for tech talent.
Moreover, the local government has been proactive in supporting tech startups through incentives and partnerships, as seen in the Digital Spain Plan 2025. This plan focuses on promoting crucial technologies like 5G and AI, further enhancing Málaga's appeal as a tech hub.
Sources: Horasis, Telework Andalucia
17) Malaga's historic center will see rising demand as more properties become luxury apartments
The historic center of Malaga is set to experience a surge in demand as more properties are converted into luxury apartments. In 2023, property prices in the historic center saw an annual increase of over 12%, reaching €4,312/m², indicating a strong upward trend in value. This rise in prices reflects the growing interest in the area, particularly for luxury real estate investments.
Additionally, Malaga has been attracting international buyers, especially from Latin America and Northern Europe, who are key contributors to the rising demand for luxury properties. This international interest is further fueled by the city's cultural renaissance, with new museums and cultural events enhancing its appeal. The media coverage highlighting these developments has played a significant role in drawing affluent buyers to the historic center.
Moreover, government initiatives aimed at promoting urban renewal and luxury tourism have been improving infrastructure and public services in Malaga. These efforts are likely to enhance the city's attractiveness, leading to increased property values and further driving the demand for luxury apartments in the historic center.
Sources: Idealista, Savills, The Olive Press
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.