Spain 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 Andalusia 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 Este (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 Centro 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 Churriana 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.