The city of Málaga has once again seen records broken in both the prices of property sales and rental markets. Málaga capital closed February with an average cost per square metre of €2,932, while in January, the average rental price reached €13.52 p/m². Both of those average prices exceed the highest prices seen in 2007 when both markets saw new record prices set.
Buying in Málaga
Both markets show significant year-on-year increases, double-digits. In the ranking for property for sale, Málaga is the second placed city, after Palma de Mallorca, in terms of annual increases, seeing a massive 18.2% rise since the same month in 2022. Also noteworthy, this increase is the highest single increase in the entire history of records, even beating the previous high of 17.4% seen in January 2006, just prior to the collapse. The rest of Spain, while catching up, remains around 29% below those historic highs.
The current price (€2,932 p/m²) is 5% above the previous record registered during the bubble of 2007, when prices reached €2,778 p/m².
“The price of housing reached record figures again with the greatest acceleration seen in the last 17 years. We have never before seen such a large price increase in such a short period of time. This increase brings us back to 2006 levels, prior to the real estate bubble when the cost of housing suffered a great increase. These significant increases coincide with the change in monetary policy due to the rise in interest rates by the ECB. Buying demand has resurfaced and society is experiencing a ‘buy now or never’ moment before mortgages tighten even further. A situation that complicates access to housing, since Málaga has practically no public social housing stock, which further aggravates the difficulties“, commented María Matos, Director of Studies and Spokesperson for Fotocasa.
Renting in Málaga
What is worrying the experts more than the sales increases are the increases in cost of property to rent in which the annual increase has exceeded 30%, with a year-on-year increase of 31.3% seen at the end of January 2023, also the highest single increase seen in the entire history of records.
At the end of February, the increase is slightly more moderate, yet still significant, at 23%. Since February 2022 there have been continuous double-digit increases seen on a monthly basis. In fact, rental prices have risen consistently since October 2021.
Since then, average rental costs per square metre have risen from €11 to more than 15 euros. Specifically, from €11.93 p/m² in February 2022, at €15.03 p/m² in February 2023.
The cost of a lease is now 57% above the price of 16 years ago, when it stood at €8.43 p/m². Therefore, the current cost of housing in the municipality of Málaga (€13.22 p/m²) is significantly higher than the price of 2007, when unanimously throughout Spain the highest prices in the historical series were reached.
“The rental price in Málaga, as in Andalusia and in practically all of Spain, reached its maximum historical level, with an upward trend. Since the recovery from the financial crisis, in 2015, Málaga has followed the same trend as the Spanish average, but in a more accentuated and intense way and presenting much more pronounced increases. Although 2022 marks a milestone in the evolution of this market with the reduction in housing supply by more than 30%, it is the main cause that pushes the price up, since each time the gap between supply and demand is more considerable. The rage to sell, the return of tourist homes to the holiday market and the over-regulation of the market, considered as such by the owners, have drastically contracted the stock. This situation added to the increase in inflation, which influences the homes that come on the market, makes access to housing even more difficult“, explained spokesperson María Matos.