Research – April 2019

REPORT Savills Research Málaga Residential 2019 Foreword

Residential market keys

Factors that will set the future of the city

In recent years, Malaga has achieved several The new-build residential market is clearly major milestones in a short period of time. It consolidating, with growth expected to continue has greatly expanded its range of cultural sites and over the coming years. However, this market museums, putting the city on a similar standing to remains outpaced by housing resales which have other leading European cities. The major Puerto- accounted for the most property transactions in Ciudad project has integrated the port area into recent years. the city centre for example, while the city has also Renting has rapidly become a popular option improved connections in the centre by launching on the city's market. The new lifestyle of young a metro network, and improved mobility and people looking to find a home, combined with reduced pollution by pedestrianising its old town – the difficulties of buying a house nowadays, have all measures which are driving retail activity in the led to a growing interest in renting. The city's area and the wider city. flourishing holiday market has also impacted the The residential market has also been impacted rental market, with investors drawn by attractive by this transformation and continues to grow year yields and limited hotel supply. This has led to after year. The gradual completion of exceptional unprecedented rental price hikes across the whole projects (such as Torre del Rio, Térmica and Colinas city, with demand shifting towards other del Limonar) that will add 2,900 new homes to the locations in Malaga's metropolitan area. market in the mid-long term, combined with a lack of supply, has pushed up prices across nearly every area of the city and its metropolitan area. So, what is expected in the short term? Residential developments are mainly located in a few very specific areas: Puerto de la Torre-Teatinos, Carretera de Cádiz and the Eastern district. The central Teatinos area has registered continued growth for the last three years as not only is it well- José Félix Pérez-Peña connected with the rest of the city, it is located Andalucía Director close to one of the city's top hospitals and the +34 952 06 27 82 university area. [email protected]

Contents

4-5 6 7 New multi-family New single-family Sales rate We examine in greater detail the type We focus on the single-family home We analyze the sales rate for the of residence that is growing the most residential market

10-11 12-13 15 Second-hand Rental markets Contacts Growth, prices and current situation The rise of this "lifestyle" comes into Your Residential and Analysis Team in of the most traded housing in the city the picture. What is your position in the city?

savills-aguirrenewman.com/research 2 3 savills-aguirrenewman.com/research New multi-family New multi-family

Colinas del Limonar, Teatinos and the western area

of Málaga are positioned as the focal points of the The districts with the residential market 49% highest initial supply are 14% 8% Puerto de la Torre-Teatinos (49%), Carretera de Cádiz (14%) and Málaga (8%)

Average price Evolution of the average price of multi-family housing Distribution of average prices Average new multi-family housing prices by district Málaga, a notable destination in the Spanish residential market, has Average price (€) Average price (€ per sq m, right axis) €1,060 per sq m become, alongside Madrid, Barcelona, Alicante and the 300,000 € Balearic Islands, a safe investment for buyers, 2,000 € sellers and investors. €2,066 per sq m 250,000 € Changes in consumer behaviour, new €1,759 per sq m infrastructure, tourism, 200,000 € 1,500 € cuisine and the wide m cultural offering have been €3,337 per sq m €1,665 per sq m key factors for the sq € increased interest in the 150,000 € €2,817 per sq m €1,828 per sq m city.

1,000 € € per

Despite the steady €2,032 per sq m strengthening of the new 100,000 € residential development market, second-hand housing has continued to 500 € make up the majority of the 50,000 € city's transactions since the onset of the new expansion €1,383 per sq m cycle in 2013 and the Málaga Este Ciudad Jardín Palma-Palmilla recovery of the residential - € - € Bailén-Miraflores Cruz del Humilladero Carretera de Cádiz market. 2014 2015 2016 2017 2018 Rincón de la Victoria Puerto de la Torre-Teatinos Alhaurín de la Torre Colinas del Limonar, Source Savills Aguirre Newman Research €1,594 per sq m Teatinos and the western Source Savills Aguirre Newman Research area of Málaga are positioned as the focal points of the residential New multi-family New Projects market. Limited supply, rising prices and large residential projects What can we expect from the residential in Malaga? We are approaching market stability within the upward The Málaga residential market has Supply the city, standing at €260,457, 20% Torre del Río Project Martiricos Project cycle of recent years. If the been growing during the last few During the last 12 months, the higher than that registered in 2017, 1This project consists of a 3Surrounded by a large urban macroeconomic variables years driven not only by the entry initial supply has been focused in leaving the average capital value at residential building in second- park of more than 20,000 sq do not show substantial of major developers at the national the districts of Puerto de la Torre- €2,159 per sq m. line residential blocks formed m, the project will provide the changes, it is foreseeable level, but also by the strong Teatinos (1,709 housing units), by 99 housing units (Residencial development of open market that the trend will continue comeback of local developers. Carretera de Cádiz (479 units) and The highest average prices are Halia, currently on the market) housing, social housing (“VPO”), to rise in the short and Málaga Este (285 units). found in the Centro district and three residential towers offices and commercial spaces in a medium term. 2018 was characterised by the (€3,337 per sq m), Málaga Este (Picasso Towers). A hotel will be privileged area next to the historic consolidation of the new It is important to note the (€2,817 per sq m) and Puerto de la constructed, and a school is also city centre. development market. However, a overall decline in supply in all Torre-Teatinos (€2,066 per sq m). expected. Repsol Project decline in the supply of new the districts, due to the complete La Térmica Project 4The central focus of this project housing was observed in some sale of units in several projects On the other hand, the districts 2 An innovative project will be a large park which will areas of the city, which favoured currently under construction. with the lowest average price were designed by the prestigious include VPO housing, open market an increase in prices. Ciudad Jardín (€1,060 per sq m), French architectural firm Francois housing, and commercial spaces. The most notable decreases took Churriana (€1,383 per sq m) and Leclercq. This project will comprise There is a plan to build a massive Construction work, marked by the place in the areas of Rincon de la Alhaurín de la Torre (€1,594 per of various uses within an island office park, making it not only the José Luis Bravo presence of cranes, has been Victoria (-23%) Carretera de Cádiz sq m). design with large open areas facing driving force of the city, but also the Residential coordinator, concentrated in the different parts (-36%), Centro (-41%) and Ciudad the sea. office centre of the Costa del Sol. Andalucía of the Carretera de Cádiz district, Jardín (-65%) Images are representative and contain no contractual value the central hub of Teatinos and the Tomillar zone, along with Colinas Prices del Limonar in Málaga Este. The scarce supply has heightened * Housing units that make up the major residential projects the increase in the average price in +2.900 in the city *Rough estimate savills-aguirrenewman.com/research 4 5 savills-aguirrenewman.com/research New single-family Marketing period

72% of the new single- family housing supply in the 72% city is attached The districts that registered 38% the highest initial supply 28% 17% were Alhaurín de la Torre (38%), Churriana (28%) and Puerto de la Torre-Teatinos (17%)

Distribution of average prices Average new single-family housing prices by district Multi-family housing 5,2 The average percentage sold per month €1,955 per sq m 19,1 The average marketing period (months) Single-family housing €2,844 per sq m €1,461 per sq m 6,1 The average percentage sold per month

16,5 The average marketing period (months)

€1,265 per sq m The sales rate stabilizes Centro Málaga Este Ciudad Jardín Palma-Palmilla €1,620 per sq m Bailén-Miraflores Cruz del Humilladero Carretera de Cádiz New construction housing sales rates stabilized in the city Rincón de la Victoria Puerto de la Torre-Teatinos Churriana Alhaurín de la Torre Multi-family housing Source Savills Aguirre Newman Research In 2018, excellent figures were recorded in terms of number of sales in multi-family housing. A total of 33 projects reached sales New single-family figures of 100%. Concentration of supply and price growth The average marketing period for a residential project with an average number of 56 units was The development of single-family housing residential projects during the last months 19.1 months. This sales rate tends was concentrated in the same areas as in of 2018. (€2,844 per sq m), Puerto de la Torre (€1,955 to stabilize within the usual range previous years. The districts of Málaga Este, per sq m) and Alhaurín de la Torre (€1,620 of 18-20 months. For the same Puerto de la Torre, as well as those close to Prices per sq m. project size, the percentage sold the city (Churriana, Alhaurín de la Torre The limited supply of single-family housing per month stood at 5.2%. and Rincón de la Victoria) accounted for the led to an increase in the average price, majority of this housing supply. which stood at €344,011, 25% higher than Single-family housing that registered in 2017. With regards to the With regards to single-family Supply average capital value, this amounted to housing, the average marketing During the last 12 years, the largest volume €1,800 per sq m. period was 16.5 months for a of initial supply took place in the districts standard project of 22 units, with a of Alhaurin de la Torre (192 housing units), The highest average capital values were sales rate per month of 6.1%. Churriana (142 units) and Puerto de la Torre recorded in districts of Málaga Este district (83 units).

It is important to mention the drop in initial During the last year, the initial supply was centred in the supply in the area of Málaga Este (-53.8%), districts of Alhaurín de la Torre, Churriana and Puerto de la the only district with a decline. This decrease Torre can be attributed in the complete sale of two

savills-aguirrenewman.com/research 6 7 savills-aguirrenewman.com/research Sun Beach Leisure Communications Málaga Culture Gastronomy Business

savills-aguirrenewman.com/research 8 9 savills-aguirrenewman.com/research Second-hand Second-hand

Distribution of average prices Average second-hand housing prices by district Transactions New development vs Second-hand

€1,694 per sq m 9,000 Second-hand New development

€2,110 per sq m 8,000

€1,692 per sq m 7,000

€2,896 per sq m €1,943 per sq m 6,000 €3,312 per sq m €1,972 per sq m

€2,292 per sq m 5,000

4,000

€1,833 per sq m 3,000 Number of transactions Centro Málaga Este Ciudad Jardín Palma-Palmilla €1,654 per sq m Bailén-Miraflores Cruz del Humilladero Carretera de Cádiz Rincón de la Victoria Puerto de la Torre-Teatinos Churriana 2,000 Alhaurín de la Torre

Source Savills Aguirre Newman Research | Multi-family housing Second-hand 1,000 Second hand properties continue to be the driving force of the residential market 0 2013 2014 2015 2016 2017 2018

Historically, second-hand housing has been Prices Number of transactions Source INE the market driver of the residential market in Málaga Este, the Centro district and the The number of real estate transactions Málaga. For only two years, new developments Carretera de Cádiz formed the podium of the confirms the upward trend of the second- surpassed this housing type in terms of number markets with the highest prices in the city hand residential market. In 2018, new development transactions rose of transactions (2008 and 2009). (€3,312 per sq m, €2,896 per sq m, €2,292 per by an average rate of 16%, while second-hand sq m, respectively). During the last six years, the purchase housing grew at a rate of 21%. The scarce supply of new developments on the and sale of housing units has continued to market and their rising prices are directing On the other hand, the districts of Ciudad grow, and compared to 2013, the number In comparison with the previous period, demand towards the second-hand market. Jardín, Bailén Miraflores and Alhaurín de la of transactions completed in this type of 2018 stood out for the consolidation of new During the last year, increases have been Torre (€1,694 per sq m, €1,692 per sq m and housing has grown by 155%. During 2018, developments. There are currently many detected, both in the supply and demand for this €1,654 per sq m, respectively) recorded the second-hand housing accounted for 89% of projects in the city, which will increase type of housing. lowest average prices. the units sold in the city. the number of transactions in this type of housing during 2019 and 2020. In December 2018, Savills Aguirre Newman identified a supply of second-hand units from 5,500 to 6,000 in the districts under analysis. Despite the consolidation of the new residential developments, second-hand housing continues to make up the majority of transactions

savills-aguirrenewman.com/research 10 11 savills-aguirrenewman.com/research Rental Rental

Rental markets Distribution of average prices Average rental prices by district Changing trends are pushing up demand in the rental market €695 per month

The long-term rental housing market has live in rented flats; however, from the point undergone significant changes over the past of view of supply, this market is in a complex In 2018, the most sought-after areas were the few years. The emergence of holiday homes, situation. The market is not professional, as city centre and its immediate surrounding €896 per month the increase in demand and the lack of the majority of the supply is in the hands of areas, Carretera de Cádiz and Puerto de la adequate supply comprise this market. private individuals. Torre-Teatinos. €861 per month Recent years have witnessed a change to the The scarcity of new development buildings During the last few years, both supply and trend where typically the vast majority of dedicated to long-term rentals is one of the demand have moved from the historic centre households purchase their home. This can be key aspects of this market, with only eight to nearby areas. In these zones, prices are €896 per month attributed to the change in mentality among buildings allocated for this activity. more competitive and have good transport €848 per month young people, job expectations, problems of links with the city centre and the main office €1,151 per month €762 per month access to finance, globalization, along with Supply areas. This displacement relates to the boom the flow of information and people. This The supply of rental housing is primarily in tourist-centric accommodation in the new reality is bringing the rental levels of focused on multi-family units. This type has historic centre and the subsequent decline in €961 per month major Spanish cities closer to those of other been used as a reference to carry out this long-term rentals. The reason for this change European cities, although the difference is analysis. is the greater profitability on tourist rentals. still notable. Savills Aguirre Newman estimates the supply Rents In Malaga, the market follows the trend of long-term rental housing (including The scarcity of quality supply suited to the observed at the national level. There is an exclusive buildings for rent) is between 1,000 needs of the demand and the boom in tourist increase in the number of households who and 1,300 units. accommodation have contributed to the €794 per month Centro Málaga Este Ciudad Jardín Palma-Palmilla Bailén-Miraflores Cruz del Humilladero Carretera de Cádiz Rincón de la Victoria Puerto de la Torre-Teatinos Churriana Alhaurín de la Torre €614 per month Source Savills Aguirre Newman Research | Multi-family housing

increase in rental price in recent years. In side for buildings dedicated exclusively to general, the average price has grown steadily rent, on the supply side there has been limited between 2-3% per year. activity. Just one building of this kind has been registered (in the western part of the Málaga Este (€1,150 per month), Carretera de city) and it currently has an extensive waiting Cádiz (€961 per month) and Centro (€896 per list. month) were the districts with the highest rents during 2018. In the city we find only eight buildings of this type, all of them with almost 100% On the other hand, the most affordable areas occupancy, and with waiting lists that in were the districts of Alhaurín de la Torre some cases exceed a year. (€614 per month), Ciudad Jardín (€695 per month) and Rincón de la Victoria (€762 per month). In these areas, there is a special need for greater supply of quality rental housing with less pressure from demand.

Exclusive buildings for rent This type of housing (long-term rental), which is more common in cities such as Madrid and Barcelona, has not fully developed in the city of Málaga. The excellent profitability of tourist rentals (short stay) is directing the interest of investors towards this business model.

Although there is high interest on the demand

savills-aguirrenewman.com/research 12 13 savills-aguirrenewman.com/research Contacts

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Savills Aguirre Newman Andalucía We carry out a rigorous and objective analysis of the real estate market in order to be able to provide our clients with information on the real situation in each of the sectors, thus helping them to make the most appropriate decisions at each moment.

Residential

Arturo Díaz Victoria Contreras José Luis Bravo Executive Director Residential Director Residential Coordinator, Andalucía +34 93 439 54 54 +34 91 319 13 14 +34 952 06 27 82 [email protected] [email protected] [email protected]

Research

Pelayo Barroso Gema de la Fuente Jonathan Pino Research Research Research +34 91 319 13 14 +34 91 319 13 14 +34 952 06 27 82 [email protected] [email protected] [email protected]

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