30 March 2016 – La Opinión de Málaga
During the first few months of 2016, the cost of new homes in Málaga has confirmed that prices are starting to rise there again, albeit slowly and cautiously. Having said that, prices in the region are still between 32% and 34.3% lower than the maximum values recorded at the peak of the housing bubble, according to the latest quarterly report from the Town Hall of Málaga’s Urban Environment Observatory (OMAU). Last year represented the turning point with the first YoY rise in house prices since the crisis began (specifically, prices rose by 4.3% in the capital and by 3.7% in the rest of the province) and now, during the first quarter of 2016, that trend is continuing, with new increases, albeit small, but nonetheless indicative that the recovery of activity in the real estate market is starting to take hold. According to OMAU, the average value of new homes for sale in the capital (including VAT) now amounts to €2,096/m2, after an increase of 0.4% during Q1 2016, whilst the average price in the province as a whole rose by 0.7% to €1,904/m2.
“In Málaga, several new developments, above all in Teatinos and along the West Coast (Litoral Oeste), have driven the market this quarter, together with others that were lying dormant, waiting for the reactivation of the market. That is now happening in a very timid and unstable way”, says OMAU which notes that, in any case, some values are still “not showing clear trends”, with quarterly fluctuations up and down.
The western area of the Costa del Sol is the area of the province that saw the highest price rises during Q1 2016 (1.98%), whilst the West Coast recorded increases of 0.9% and the inland area recorded rises of 0.6%. The highest prices in the province (ahead of those in Málaga capital, which is ranked in second place) are in Marbella, with an average price of €2,537/m2 and a rise of 3.8% during Q1 2016.
In terms of Málaga capital, OMAU’s report indicates that prices have increased above all in the West Coast (by 3.2%) and in the Centre (by 3.1%). In Puerto de la Torre, prices rose by 8.6%, although that was the direct result of the inclusion of a specific development, which significantly affected the average for that area. Interestingly, in Teatinos (one of the areas with the most activity, where work has been on-going at five or six developments in recent months), prices fell by 2.5% during the first quarter although, in any case, prices there are still higher than they were a year ago.
Very high unemployment. The Director of OMAU, Pedro Marín, confirms the reactivation of the real estate market, in the context of the tough years of the crisis, but he warns that it is a process that must be taken “very cautiously”. “There is still a lot of uncertainty in Spain, both in terms of the economy as well as politics, and the real estate sector is waiting (to see what will happen). But it is true that construction has resumed at several developments and there are lots of adverts around”, he says. However, according to OMAU, the major problem continues to be the persistence of high rates of unemployment (almost 27% in the case of Málaga).
“In reality, whilst unemployment is so high, individuals’ capacity to obtain reasonable incomes to allow them to access the real estate market and boost demand is little more than a pipe dream…”. (…).
Original story: La Opinión de Málaga (by José Vicente Rodríguez)
Translation: Carmel Drake