Executive Summary of Costa del Sol Property Market Analysis
This report examines the historical and current trends in property prices, inventory levels, and transaction volumes in three municipalities on the Costa del Sol in the Málaga province of Spain: Marbella, Estepona, and Benahavis. These municipalities, often referred to as the “Golden Triangle,” are known for their luxury real estate market and attract a significant number of international buyers. The report analyzes historical data and recent trends to identify key factors influencing market fluctuations, including economic cycles and tourism trends.
Historical Property Prices
Marbella
Historically, property prices in Marbella have shown an upward trend, with significant growth observed in recent years. The average property price in Marbella has increased by over 13% in the first three quarters of 20241. In September 2024, the average property price in Marbella reached €4,961 per square meter, representing an 8.2% rise compared to the same period in 20231.
The most expensive area in Marbella is the Golden Mile, with an average price of €6,329 per square meter in September 20241. Other exclusive areas such as Nueva Andalucía (€5,404/m²) and Las Chapas–El Rosario (€4,740/m²) also command high prices1. In highly coveted locations like Puente Romano, prices can exceed €30,000 per square meter, while in Sierra Blanca, they can reach up to €16,000 per square meter1.
Estepona
Property values in Estepona have been rising year-on-year, but at a slower pace compared to Marbella2. The average price per square meter in Estepona varies greatly depending on the property type, size, and location2. For example, larger high-end apartments and penthouse properties in prime locations can be valued at several million euros or more2. Contemporary houses, typically set on large plots of land or in the best locations, are often priced at around half a million euros2. However, many beautiful 1-3 bedroom houses are also available, typically starting from around €200,0002.
In 2024, Estepona stands out as a more affordable option compared to Marbella, where the average house price is €3,324.60 per square meter3. Other municipalities in the Málaga province, such as Torremolinos (€3,095.10/m2), Benalmádena (€2,918.8/m2), and Fuengirola (€2,876.10/m2), also have higher average house prices than Estepona3. In September 2024, Estepona reached its highest-ever average property price of €3,582 per square meter, an 11.6% increase year-on-year1.
Benahavis
Benahavis consistently ranks among the most expensive areas in Spain for real estate4. In 2022, the average property price in Benahavis was €1.86 million5. The most exclusive area in Benahavis is La Zagaleta, where property prices start at €4 million and can exceed €30 million5.
Historical Inventory Levels
Marbella
In 2021, the prime property market in Marbella experienced a significant rebound from the 2020 slump, largely due to pent-up demand6. However, the amount of available stock was reduced by 11% in 2022 and another 8% in 20237.
Estepona
Historically, limited stock in Marbella has driven buyers to newly upcoming areas in Benahavis, Estepona, Marbella East, and Mijas Costa8.
Benahavis
In 2022, Benahavís had the highest average price for homes in Spain9. According to one of Spain’s leading developers, AEDAS Homes, inventory levels of new homes satisfy just 56% of demand from foreigners, locals, and other Spanish investors10.
Historical Transaction Volumes
Marbella Property Market Analysis
In 2021, the prime property market in the Marbella area enjoyed a significant rebound from the 2020 slump6. In 2022, sales transaction volume in the Golden Triangle was up compared to 2021 for both resale properties and new builds11. However, sales in Spain, as well as in the Golden Triangle, were down in 2023 by 9.8% and 20.31%, respectively7.
Estepona Property Market Analysis
In 2024, the luxury real estate market in Marbella, Estepona, and Benahavís saw robust growth1. In Marbella, transactions grew by 20% compared to 2023, while Estepona and Benahavís saw a remarkable 120% growth over the past 16 years1. The volume of sales transactions in the Golden Triangle practically halved during the peak of the pandemic in 202012. However, the sales volume for 2021 and 2020 combined averages a similar volume to 2019, with perhaps a slightly better performance from Estepona12.
Benahavis Property Market Analysis
In 2024, the luxury real estate market in Marbella, Estepona, and Benahavís saw robust growth1. In Marbella, transactions grew by 20% compared to 2023, while Estepona and Benahavís saw a remarkable 120% growth over the past 16 years1.
Current Property Prices
Marbella
As of December 2024, the median price of an apartment for sale in Marbella is €5,151 per square meter, while the median price for houses is €6,176 per square meter13. The average price asked for residential properties for sale in Marbella in December 2024 was €5,568 per square meter, with an increase of 16.12% compared to January 202414.
Estepona
The average price by square meter for Estepona is €3,336 as of December 2024, an increase of 0.75% compared to January 202415. The average price asked for residential properties for sale in Estepona in December 2024 was €4,017 per square meter, with an increase of 16.54% compared to January 202416.
Benahavis
The average price by square meter for Benahavís is €2,733 as of December 2024, an increase of 5.98% compared to January 202417. In October 2024, the average price asked for residential properties for sale was €5,060 per square meter, with an increase of 12.52% compared to December 202318.
Current Inventory Levels
Marbella
The stock of properties for sale in Marbella dropped by 9.03% from Q2 2023 to Q2 202419. Marbella faces challenges marked by inventory shortages, especially in beach areas20. There is a growing number of small developers looking for refurbishment projects in Marbella7.
Estepona
Inventory levels are increasing in Estepona, but they are still relatively low compared to the demand seen in recent years21.
Benahavis
Inventory levels are increasing in Benahavis, but they are still relatively low compared to the demand seen in recent years21.
Current Transaction Volumes
Marbella
As of November 2024, there were 32,313 property deals done in Malaga province, which is 1.35% above the levels of a year earlier22. Sales in the Golden Triangle have accelerated in the first half of 2024, showing a 5.4% increase over the second half of 2023 and a year-on-year increase of 3.16%7.
Estepona
As of November 2024, there were 32,313 property deals done in Malaga province, which is 1.35% above the levels of a year earlier22.
Benahavis
Sales in the Golden Triangle have accelerated in the first half of 2024, showing a 5.4% increase over the second half of 2023 and a year-on-year increase of 3.16%1. In 2024, the luxury real estate market in Marbella, Estepona, and Benahavís saw robust growth. During the first half of the year, sales of luxury properties (valued at over €2 million) increased by 19.47% compared to 2019, demonstrating a strong post-pandemic recovery1.
Economic Factors – Property Market Analysis
The real estate market in Marbella is intrinsically linked to global and local economic factors23. Economic stability in Spain, combined with favorable policies for foreign investment, has boosted interest in properties in this region23. Furthermore, low interest rates have encouraged more buyers to invest in real estate23.
Tourism Trends
Marbella has reached record tourist levels in recent years, driven by factors such as its sunny climate, luxurious lifestyle, and appeal to international buyers24. In 2024, Marbella was awarded the “Best European Destination to Visit” by European Best Destinations, surpassing renowned international hubs such as Monaco and Malta1. This accolade highlights the town’s growing popularity and appeal to international travelers24.
The COVID-19 pandemic brought an unprecedented transformation in working and living habits, with the adoption of remote working opening new opportunities for those seeking a higher quality of life25. Marbella quickly became a favorite destination, attracting international buyers and investors who saw the region as an ideal place to settle and work remotely25. This trend has been further fueled by the increasing interest from younger buyers and markets like the United States1.
Correlation between Economic Cycles, Tourism, and Property Market Fluctuations
The property market in Marbella, Estepona, and Benahavís is influenced by a complex interplay of economic cycles and tourism trends. Economic stability and growth generally stimulate demand for real estate, while tourism trends can further amplify this effect. For example, the post-pandemic rebound in tourism, coupled with the rise of remote working, led to a surge in property sales in 2021 and 20226.
Tourism trends also influence the types of properties in demand. The increasing popularity of Marbella as a luxury destination has fueled the demand for high-end villas and apartments24. The rise of remote working has also contributed to this trend, as more people seek spacious and well-equipped homes that can accommodate both work and leisure activities6.
Infrastructure Development
Infrastructure projects play a crucial role in shaping real estate values26. When new roads are built, public transport is expanded, or energy systems are upgraded, the surrounding areas often see a rise in property demand and prices26. Infrastructure development enhances accessibility and connectivity, often transforming previously remote areas into attractive locales, boosting property values27.
Policy Changes
Government policies can shape housing policies, interest rates, and zoning laws, all of which directly affect the real estate market28. For example, favorable loan policies can make housing more accessible, driving up demand and prices28. Conversely, restrictive regulations can slow development and lower property values28.
Synthesis and Conclusion – Property Market Analysis
The property markets in Marbella, Estepona, and Benahavis have shown strong growth in recent years, driven by a combination of factors including economic stability, tourism trends, infrastructure development, and favorable government policies. While there have been some fluctuations in transaction volumes and inventory levels, the overall outlook for the Golden Triangle remains positive.
Key trends include:
- Increased demand for luxury properties: High-end villas and apartments in prime locations continue to attract buyers, with prices often exceeding €10 million23. This trend is driven by factors such as the rise of remote working, the desire for a luxurious lifestyle, and the appeal of Marbella as a safe and secure investment destination24.
- Growing interest in off-plan developments: Off-plan purchases offer the chance to secure properties at lower prices and potentially benefit from capital appreciation as construction progresses29.
- Rise of luxury rentals: The popularity of short-term and long-term rentals, particularly in prime locations, is expected to continue29.
- Focus on wellness and lifestyle: Properties near wellness retreats and spas, as well as developments with state-of-the-art fitness centers and outdoor sports facilities, are in high demand29.
- Sustainability: Buyers are increasingly seeking properties with eco-friendly features and sustainable building materials29. This trend is influencing new developments and renovation projects, with developers incorporating sustainable design elements and energy-efficient technologies to meet buyer expectations7.
Influencing factors include:
| Factor | Marbella | Estepona | Benahavis |
|---|---|---|---|
| Economic Stability | High | High | High |
| Foreign Investment | Strong | Strong | Strong |
| Tourism Growth | Record Levels | Significant Growth | Strong Growth |
| Remote Working Trend | Significant Impact | Growing Impact | Moderate Impact |
Despite the positive outlook, there are some challenges facing the market, including inventory shortages, rising construction costs, and potential delays in building and planning approvals7. However, the overall strength of the market and the continued appeal of the Golden Triangle suggest that these challenges are unlikely to significantly hinder growth in the long term.
The influx of Eastern European buyers, particularly Ukrainians, Poles, and Lithuanians, has also contributed to the increased demand for properties in Marbella, Estepona, and Fuengirola29. This demographic shift could have significant implications for future market trends, potentially influencing the types of properties being developed and the amenities being offered29.
In conclusion, the Golden Triangle remains a highly attractive destination for real estate investment. The combination of economic stability, favorable government policies, a thriving tourism sector, and ongoing infrastructure development creates a positive environment for property market growth. While challenges exist, the long-term outlook for Marbella, Estepona, and Benahavis remains optimistic.
Works cited
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