Why Malaga is a «fashionable» city for the real estate sector?

Why Malaga is a «fashionable» city for the real estate sector?

Malaga is a very popular market for real estate investors due to its popularity with international tourists and expats. The city stands out among others for its stable economic situation, the degree of digitalization of services, expressive culture, good conditions for tourists and a comfortable warm climate. The demand for housing in the region is high and investors have something to earn.

Thus, according to the report «IMIE Local Markets» of the real estate valuation company Tinsa, for the third quarter of 2022, prices for residential real estate in Malaga exceeded the mark of 2,000 euros per square meter — an increase of 7.6% compared to September 2021. The report also indicates that residents of Malaga will spend an average of 39.8% of their total income on mortgage payments. This is higher than the traditional "reasonable" limit, but indicates that buyers today are ready to purchase housing by any means and on any conditions, which ensures a stable high demand for housing.

Tinsa experts note: «Malaga today is immersed in a process of active growth and transformation that goes far beyond the tourism sector. This affects the influx of population, which leads to an increase in demand and, naturally, an increase in prices. Malaga became one of the first cities in Spain to begin an active post-pandemic recovery a year and a half ago. From quarter to quarter, prices for local real estate have only been growing and there is no sign of a cooling market yet».

Representatives of the developer Exacon SmartLiving point out that a big role in the development of Malaga was played by the spread of remote employment during the pandemic and after it. People stopped being tied to their place of work and were able to move to more attractive cities and regions of the country. Thus, the growth of the consumer base in Malaga is determined not only by the abundant attention from abroad, but also by strong internal migration.

According to CBRE data, Malaga has become one of the main destinations for real estate investment in Spain. So, already at the end of 2021, the total value of transactions concluded in the city exceeded 105 million euros. In Malaga, both projects for the average buyer and more exclusive offers are being developed. Alternative forms of real estate, rental assets, student housing and the koliving segment are developing.

According to Exxacon, one of the strengths of the city is the degree of technological development of the local construction sector and the real estate market. This is largely due to the high level of business activity of local entrepreneurs, large companies and investors, various proptech startups. Today there are offices of 620 international companies in the city, including Google, Vodafone, Huawei, Dekra, Oracle and TDK.

Despite the fact that the city is located in the very south of Europe, it has excellent transport and infrastructure links with the rest of Spain and the eurozone countries. Malaga-Costa del Sol Airport, the fourth largest in the country, is of great benefit. There is also a wide network of high-speed trains that connect Malaga with cities such as Seville, Madrid, Valencia and Barcelona.

Exacom also notes that the city offers not only cultural, entertainment and gastronomic diversity to attract international and domestic tourists, but also has a developed and affordable system of medical care and education. This, in turn, popularizes Malaga among the «family» category of buyers and tenants of real estate.

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