27 March 2017 – Málaga Hoy
Málaga is the Spanish province with the most real estate tension, given that it has the highest index of sales as a proportion of existing stock, a parameter that indicates the dynamism of the area. Moreover, that pressure is leading to an increase in house prices, to the extent that Málaga has seen the third highest price rises of all of Spain’s provinces over the last three years.
Those are the findings from the Real Estate Market in Spain report, prepared by BBVA, which was presented in Málaga on Thursday by the analysts Félix Lores and David Cortés. The study reveals that between 2014 and 2016, 28.4 homes were sold in Málaga for every 1,000 property stock, thanks to an increase in demand during the period of almost 15%. The only other province to come close was Alicante, with 25 purchases for every 1,000 homes; and Málaga was thirteen points above the Spanish average. That was, in part, due to the fact that Málaga and Alicante are the two Spanish provinces where most homes are sold to non-resident foreigners.
When demand exceeds supply, prices rise. On average, Málaga was the third-ranked Spanish province in terms of the highest house price rises between 2014 and 2016, at 3.1%, triple the national average. During that period, property prices rose by more only in the Balearic Islands (3.5%) and Barcelona (3.3%). In more than half of Spain’s provinces, not only has a reactivation of the market not been felt, but house prices are continuing to fall. In Sevilla, for example, house prices decreased by 1.6% during the same period.
“Sales have been recovering since 2013, with Madrid, Barcelona and the Mediterranean region, together with the islands, leading the way”, said Lores. According to these experts, this boost is consolidated because it is being driven by an improvement in employment and household income, which means that it is not subject to speculative movements (with feet stuck in the mud) like in the case of property price bubbles. In fact, the analysts from BBVA deny that we are seeing the start of a real estate bubble.
Looking to the future, Málaga is also one of the leading provinces in Spain, given that it is one of those that has most contributed to the increase in visas in the country, together with Madrid, Barcelona and Alicante. Between 2014 and 2016, the number of housing visas granted grew by 55% in Málaga, although it is worth remembering that the starting point was very low and well below than the volumes signed at the height of the real estate boom. More business is forecast because, amongst other factors, the sector has been so quiet in recent years, also demand exists and supply is limited, however there are several uncertainties, such as the effect of Brexit on British residential tourists, the macroeconomic impacts that Trump’s protectionist policies in the USA may have and the results of upcoming elections in several European countries.
Original story: Málaga Hoy (by Ángel Recio)
Translation: Carmel Drake