Malaga offers a unique combination of opportunities. It has become an increasingly popular destination for investment, thanks to an attractive entrepreneurial ecosystem.
With the property market booming, Malaga is no exception to one of society's main problems, namely, the difficulty in accessing housing.
Professionals from the sector gathered at the business meeting organised by the Association of Developers and Constructors (ACP), The participants, in which Gesvalt took part, agreed that urgent action is needed to facilitate access to subsidised housing for a larger part of society, as well as to increase the supply of housing in order to reduce prices.
In addition to the problems endemic to the sector, there are also the long processing times, a problem that is not conducive to lower house prices.
Housing data from the Gesvalt 2Q 2023 report
House prices in Malaga continues to rise above the rest of the Spanish provinces. This rise is maintained, both in rentals and purchases, above double digits in the province and the capital for the second quarter of 2023.
With regard to the evolution of rental prices, after the Balearic Islands (+22.41 Tbp3T), Malaga (+17.91 Tbp3T) led the increases.
Some highlights on trends, opportunities, housing and investment in Malaga.
Trends in buying and renting in Malaga
Our data indicate that before the end of the year, house prices should stabilise and even fall slightly in certain areas where the difference between supply and demand is not so pronounced.
Our estimate is that this year could see an adjustment in the volume of second-hand housing sales of around 101 PPP3T. This phenomenon, in turn, could also lead to a shift in demand towards the rental market, which is also under stress.
The price of housing in Andalusia has increased by 7.8% in the second quarter of the year. With this increase, the average price per square metre in the Andalusian region stands at €1,328, compared to €1,568 per square metre in Spain, according to data from Gesvalt's Housing Price Report.
By autonomous regions, Andalusia (20.0%), Valencia (16.3%) and Catalonia (15.7%) are the three leading regions in terms of sales in the first quarter of 2023.
Foreign purchases and sales in the first quarter of the year accounted for 19.51 PTP3T of the total number of transactions.
According to our latest trend report For this year, we estimate that the assets with the highest growth prospects and which will be most in demand will be affordable housing. In fact, we reinforce this idea after the government's initiatives related to the new Housing Law and due to the supply crisis we are experiencing.
Build to Rent and co-living, new housing concepts that cater to the needs of the market, are also generating great attraction for investors.
Innovation and sustainability
As is happening in other communities, sustainability is driving change and improvement in all sectors. The obligation to report on ESG criteria will be the definitive boost to the commitment to sustainability.
Companies that demonstrate their commitment to sustainability help reduce uncertainty, increase transparency and improve stakeholder trust.
In this sense, it is the developers who are proactively taking an interest in sustainable criteria and their application in housing.
These companies are aware of the competitive advantage of an ESG-labelled investment, both in terms of potential buyers to differentiate themselves from the competition and in terms of seeking liquidity.
With regard to the latter, sustainability is becoming the ideal tool for these companies to attract financing. In this regard, it should be noted that green financing grew by 42% in our country during 2021, reaching a figure of 47,000 million euros. Another sign of its rise and its impact on developers is that, of this total, 13% has been earmarked for construction.
At the residential level, the main segment where the implementation of sustainable techniques is accelerating, the impact of ESG on asset value is yet to be determined as more research, market experience and comparable samples will be needed to define it more accurately. However, the track record in this field already allows us to ensure that a building with sustainable criteria could increase its price by up to 10%.
On the other hand, sustainability also increases the value of an operation or a company. The intangible impact of companies is gaining momentum and is increasingly decisive for investors. It should be noted that companies need to back up their sustainable investments with a large amount of prior documentation. This brings a positive impact and greater certainty to the investment, allowing them to make more reliable financial projections and attract more investors.
Opportunities in Malaga
Malaga is being the investment enclave in our country. The EXPO27 bid further increased interest in the city.
The city continues to be one of the most frequently chosen by investors for major projects, making it the Andalusian city with the greatest growth prospects.
In this sense, the profile investing in Malaga is foreign, mainly American, and is focused on the existing luxury market in the city.
On the other hand, Malaga is attracting many technology companies that are relocating or locating their corporate headquarters in the city. This generates, consequently, greater business wealth and a growing attraction of the investor profile.
In addition, these inhabitants also require housing, which again has an impact on the demand for housing.
The outskirts of the city are also expanding due to the implementation of large-scale industrial and residential projects that will generate a great deal of interest and investment capacity.