Property prices in Costa del Sol and Marbella have seen ups and downs through the decades, but none more surprising than those in the past three years. With so much that has happened from 2019 through 2021, who could have foreseen what the property market would be like in 2022?
In this article, we attempt to examine just that.
Read on to discover the factors leading to the fall and rise in Costa del Sol’s and Marbella’s property prices, the average house prices there today, plus a market prediction for 2022.
So, if you’re planning to invest in Costa del Sol or Marbella properties this year or you’re simply curious about the property market, take a look below.
Table of contents
- Market Overview
- Average House Prices in Costa del Sol & Marbella
- Future Prognosis
Out of all the factors affecting Costa del Sol’s property market, two stood out in particular: the COVID-19 pandemic and Brexit.
The pandemic-caused downturn affected many of Spain’s industries. Surprisingly, however, the property market in Costa del Sol was gaining momentum. This was mainly caused by the rise in sales of mid-priced and luxury real estate.
Costa del Sol’s property market wasn’t always so promising, though. The potential it showed in the early 2010s was already slowing down come 2013. This downtrend culminated in mid-2019 when the uncertainty surrounding Brexit caused enquiries from British citizens to dwindle.
While demand from Britain slowly returned at the tail end of 2019, the 2020’s global COVID-19 outbreak completely halted market movement for a time and brought about even more uncertainty.
Let’s take a closer look.
The Effect of Brexit and COVID-19 on Real Estate Prices
Brexit certainly caused a stir in Costa del Sol’s property market. The market saw a 41.1% decrease in purchases made by British nationals in 2019 just as the date of Brexit’s full implementation approached.
However, Brexit did not have any long-lasting effects – the anxiety and uncertainty passed by the end of 2019 when the enquiries and purchases from Britain returned to pre-Brexit levels.
If Brexit came and went with a minor long-term effect on the real estate of Costa del Sol, the COVID-19 pandemic in 2020 would take the market into a direction no one expected.
In the pandemic’s early days, Costa del Sol’s property market came to a standstill. With worldwide lockdowns restricting travel and other activities, the market would see fewer enquiries and purchases from buyers, both local and foreign. At this point, there were no signs that the property market could recover any time soon.
That is, until the 3rd quarter of 2020 when the market activity slowly returned, particularly for mid and luxury-tier properties. The market has been on a resurgence since then, as demand from Britain, Germany, France, and other countries continues to pour in. This unexpected increase in demand was in part caused by remote working and people looking for more spacious homes with versatile amenities.
With high demand for luxury properties continuing to mount, the market started seeing property prices rise as 2021 rolled in.
Property Prices Were Rising in Costa del Sol
The price growth that started in late 2020 continued into early 2021 and it was driven by several contributing factors.
These factors included:
- High demand from people looking to visit Costa del Sol during lockdowns, a large number of whom were foreigners.
- Residents converting their vacation home in Costa del Sol into their main home.
- The huge increase in remote working, which brought about a high demand for properties with larger open areas, better communal facilities, and an excellent internet connection.
- Andalusia decreasing its property transfer taxes and stamp duty rates as well as virtually eliminating the inheritance tax and gift tax. Even more tax reductions are being planned for the future.
- Mortgages were easily accessible due to low interest rates.
- Real estate is viewed as a safe investment opportunity during the pandemic because of the temporary drop and the general rising trend in property prices.
All of the factors above caused property prices to rise in 2021. The records for 2021’s largest price hikes belonged to Sierra Blanca and Nueva Andalucia which saw property prices rise by 41.2% and 38%, respectively.
Average House Prices in Costa del Sol & Marbella
Below, we have listed the most in-demand cities and towns comprising Costa del Sol as well as the most popular districts of Marbella. Based on up-to-date statistics from Spainhouses.net as of February 2022, we have brought out the average price per square meter for each city and district. These figures are calculated based on all property transactions, including flats and houses.
Marbella is a city and municipality in southern Spain, within the autonomous community of Andalusia. The city is located on the coast of the Mediterranean Sea, in the foothills of the Sierra Blanca mountain range. It’s one of Costa del Sol’s most important tourist destinations, attracting huge numbers of visitors each year.
Nagueles-Milla de Oro
Nagueles-Milla de Oro is a district in the municipality of Marbella. It’s comprised of several quarters that include Nagueles and Sierra Blanca.
Nagueles is a quarter that’s characterized by its sloping roads and mature trees.
Average price per square meter in Nagueles: 3,780 €
The Sierra Blanca residential area takes its name from the mighty mountain range which shelters the area from strong winds and excessive summer heat.
Average price per square meter in Sierra Blanca: 4,667 €
Nueva Andalucia is one of the five districts that make up the municipality of Marbella. This district is known for its luxurious villas and world-class golf courses.
Puerto Jose Banus, or simply Puerto Banus, is a marina located in the district of Nueva Andalucia. Built by Jose Banus to be a luxury marina in 1970, it has since become one of the main entertainment centers in all of Costa del Sol.
Average price per square meter in Nueva Andalucia: 5,170 €
Real Club De Golf Las Brisas, or Las Brisas for short, is an exceptional golf club located in Nueva Andalucia’s Golf Valley which also contains an exclusive residential area.
Average price per square meter in Las Brisas: 5,199 €
San Pedro de Alcantara
San Pedro de Alcantara is a small town and district in Marbella. What was once a town famous for sugar cane is now a family-friendly town that has maintained its distinct traditional feel.
Guadalmina Baja is a residential area located on the beachside of the Guadalmina area. This development started construction in 1960 and now contains some of the area’s most luxurious villas.
Average price per square meter in Guadalmina Baja: 4,724 €
Las Chapas-El Rosario
Las Chapas-El Rosario is a district in the eastern part of Marbella. This district is culturally famous for its archeological sites with some dating back to the bronze age.
Las Chapas is a residential area located in the district of Las Chapas-El Rosario. This neighborhood faces the Mediterranean Sea and is just a few minutes away from Rio Real Golf and Marbella proper.
Average price per square meter in Las Chapas: 3,304 €
Rio Real-Los Monteros
Rio Real-Los Monteros is a district in eastern Marbella facing the Mediterranean Sea. It’s well known for its stunning stretch of beach and first-class golf courses.
Rio Real is a residential area located by a golf course of the same name. Villas in this area enjoy open views of the golf course and the sea.
Average price per square meter in Rio Real: 4,225 €
Los Monteros is an exclusive residential area in the district of Rio Real-Los Monteros. This area is best known for its spacious streets and superb fish restaurants.
Average price per square meter in Los Monteros: 4,757 €
Elviria-Cabopino is a district in Marbella known for the five-star Don Carlos Hotel, the popular Nikki Beach Club, and world-famous Santa Maria Golf & Country Club.
Marbesa is an exclusive residential area found in the district of Elviria-Cabopino. It’s characterized by its gentle slopes, sea views, and winding streets leading to its beautiful stretch of beach.
Average price per square meter in Marbesa: 4,553 €
Benahavis is a village set in the mountains of western Costa del Sol. It’s situated near three excellent golf courses and gets great views of the La Serrania de Ronda mountain range.
La Zagaleta is the name of an exclusive housing development located in Benahavis. This community contains some of Costa del Sol’s most luxurious villas and has been said to be one of Spain’s most exclusive communities.
Average price per square meter: 6,656 €
Estepona is a town and municipality in Costa del Sol. It’s most known for its beaches which stretch about 21 kilometers along its shoreline.
Average price per square meter: 3,562 €
Mijas is a municipality within Costa del Sol. At its heart stands a typical Andalusian white-washed village set on a mountainside, 430 meters above sea level.
Average price per square meter: 2,701 €
Benalmadena is a town in Andalusia, within the region of Costa del Sol. Its wealth of beaches, hotels, restaurants, and activities attract many tourists on holiday vacations.
Average price per square meter: 2,859 €
Fuengirola is a town and municipality in Costa del Sol. Known as Suel and then Suhayl in ancient times, it’s become one of Costa del Sol’s best-developed seaside towns.
Average price per square meter: 2,765 €
The property markets of Costa del Sol and Marbella defied all expectations in 2021 and continued to attract more investors as 2022 began. But, can we expect this uptrend to continue as the rest of 2022 unfolds?
The international real estate consultancy Knight Frank predicts that Spain will be among the top investment destinations this year. The company’s Active Capital report, which analyzes global markets and capital, sees Spain receiving close to 7,500 million euros in real estate investments.
Oxford Economics senior economist and property market expert Ricardo Amaro believes that the Eurozone’s unexpected price growth is going to continue in 2022. In its latest research, Caixabank predicts house sales to reach 500,000 and prices to rise by 4% this year.
The way the Eurozone’s price growth is going, some experts believe that the market may be heading into another housing bubble like the one in 2007. This housing bubble saw demand for property skyrocket, supply unable to catch up, and inflation in property prices. Thousands of families living in mortgaged houses nationwide felt the impact when this housing bubble burst in 2008.
Is there a chance for the market to suffer the same fate as then?
Luckily, the prevailing opinion among experts is that a similar bubble is improbable, as this time around Spanish banks are implementing more sensible interest policies. Unlike in 2007, interest rates nowadays are generally fixed for longer periods, therefore dampening any risks of homeowners being unable to pay off their mortgages.
What will the Costa del Sol and Marbella markets be like in 2022? With the way things are going, the future seems bright.
The property markets of Costa del Sol and Marbella have experienced a few sudden halts and surprising resurgences in the past three years. Read the article above to discover what factors led to the recent price changes, how much these factors contributed to the rise of property prices in both areas, and what you can expect the property market to be like for the rest of 2022.
If you’re planning to invest in Spanish real estate, we recommend you take a look at our guide on how to buy a house in Spain.
Or, if you have any real estate-related questions, feel free to get in touch – we’ll gladly answer all your queries.