Costa del Sol Property Market 2025-2026: Record Prices, Strong Demand, and Limited Supply

📊 Key Market Data

• Average asking price: In October 2025, Málaga province reached €3,842/m², showing a 13.8 % annual increase.
  Source: Idealista News
• Valuation data: Independent appraiser Tinsa confirms double-digit growth across Marbella, Estepona and Benahavís during Q3 2025.
• Sales volume: Málaga province closed around 37,800 transactions in 2024, with ~39 % of buyers from abroad — Spain’s highest foreign share.
  Source: Spanish Property Insight
• Rental yields: Spain’s average gross rental return stands near 5.6 %, reflecting continued investor appetite despite rising prices.
  Source: Global Property Guide

🚀 What’s Driving the Market

• International demand: Strong inflows from Northern Europe, North America and the Middle East continue to fuel the market.
• Limited land supply: Coastal municipalities face tight planning and slow permitting processes, restricting new stock.
• Rising construction costs: Developers focus on premium, efficient, off-plan projects to protect margins.
• Economic stability: Softer inflation and improved mortgage conditions support sustained buyer confidence.

🎯 Implications for Buyers & Sellers

For Sellers

• It’s still a strong moment to sell, but success requires realistic pricing.
• Even in high demand, overpriced listings tend to stagnate.
• Professional presentation and accurate documentation are key to fast sales.

For Buyers & Investors

• Off-plan and new developments with sustainable design offer solid long-term value.
• Prime coastal projects move quickly; decision speed matters more than negotiation margin.
• Strong rental yields make investment property attractive for medium-term returns.

🔭 Outlook for 2026

After two years of accelerated growth, analysts expect moderate but positive price evolution.
Supply remains tight, while new construction pipelines aim to balance demand gradually.
Tourist-rental regulations and land-use limits will be decisive in shaping the next cycle.

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