The excess demand and lack of supply in the real estate market have created an imbalance across the country, and Málaga, one of the nation’s most thriving cities, is no exception. According to idealista/data, house prices in the province have risen by 11.9% in one year, while in the city, they have surged by 17.9%.
Over the past decade, the province has added 3,000 to 4,000 units to the housing market each year. However, the real estate consultancy Savills states that to align the supply of new housing with the projected demand for new homes, approximately 7,500 new units would need to be introduced to the market annually.
However, considering the deficit accumulated over the past decade, the firm warns that approximately 12,000 new-build units must be produced annually in the city and its metropolitan area over the next five years, which includes both affordable and subsidised housing. In other words, this would require tripling the current rate of residential development.
The report also indicates that Málaga will be the Spanish province with the highest increase in the number of homes over the next 15 years. The real estate consultancy forecasts that this figure will rise by more than 20,000 units per year by 2028.
New residential formulas
Firstly, the new co-living and flex-living models are emerging as significant trends. To date, the province of Málaga has 1,500 units, and over the next four years, Savills forecasts that an additional 3,300 residences of this new model will be introduced.
Another sector that is helping to absorb part of the demand and alleviate pressure on the rental market is student accommodation, with the coastal city currently offering a total of 3,225 beds. An increase of 600 new places is expected by 2028.
It is important to note that, similar to property prices, rent has skyrocketed this year. Rental prices in the province has risen by 10.1% compared to September last year, while in the city, it has increased by 13.2%, according to idealista/data. This is why Savills emphasises the need to expand the residential offer.
“All this new supply of housing models is designed for different population profiles, ranging from students to young professionals and families. It is focused on well-connected areas that align with demand, providing options that complement the city’s economic growth and the arrival of companies and universities that foster talent attraction and retention,” argues the consultancy firm.
Hotels
According to Savills, hotel beds in the Andalusian city have increased by 14% compared to 2019, the year before the pandemic. Despite this growth, the average hotel occupancy in Málaga this summer was nearly 91%, according to the Association of Hoteliers of the Costa del Sol (Aehcos).
In this context, the consultancy firm highlights the need to further increase the number of hotel beds in the city to accommodate the rise in tourists, which reached 6.2 million this summer, according to data from the Provincial Council of Málaga.
Tourist accommodation
The Savills report also highlights that the number of properties for tourist use has risen significantly. In just one year, nearly 6,000 new properties have been added, bringing the total to over 41,000 homes in the province, according to the National Statistics Institute (INE). This makes Málaga the Spanish province with the highest number of tourist rental properties.
