Research – March 2020

REPORT Málaga Residential Savills Research 2020 Foreword

Key aspects of the residential market Factors that will determine the future of the city

Malaga has been undergoing The areas where the residential development unprecedented transformation for several is concentrated are -Teatinos, years. With good transport links by land, sea Carretera de Cadiz and the district, which and air, the city has a wide offering of cultural stand out for their good transport links and wide activities such as museums and galleries, putting variety of services available to residents. In addition it on the same level as other major cities in to these areas of expansion, the centre and its Europe. Furthermore, its historic centre, which is immediate surrounding areas continue to attract pedestrianised, has resulted in reduced pollution the interest of developers and end buyers. alongside increased commercial and business activity. The rental market, expanding in all major Spanish cities, is not an exception in Malaga. However, this The residential market is a good indication of is still a pending matter, as it is still very limited all these changes, with the approval of esteemed in certain areas due to the expansion of holiday projects such as Torre del Río, La Termica, housing. The city requires quality and professional Martiricos and Colinas del Limonar, as well as other rental housing stock to accommodate a demand new projects, namely the future developments that has been growing in recent years. of Sanchez Blanca, Santa Rosalia and the former Repsol land plots. These will breathe new life into the city, as they will not only alleviate the demand for quality housing, but also include the construction of large green areas and extensive parks, bringing a larger focus to the city.

Malaga has clearly set its sights to the future, with aspirations to grow into a great city. The new trend in the city's residential market is the development José Félix Pérez-Peña of multi-family housing projects, an ecological Andalucía Director and future-oriented solution that aims to position +34 952 06 27 82 Malaga among the large international cities. [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?

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The districts with the Colinas del Limonar, Teatinos and the western area highest initial supply are of Málaga are positioned as the focal points of the Puerto de la Torre-Teatinos 52% (52%), Carretera de Cadiz residential market 13% 10% (13%) and Malaga Este (10%)

Average price Evolution of the average price of multi-family housing Distribution of average prices Average new multi-family housing prices by district Málaga, the reference residential market in Spain, Average price (€) Average price (€ per sq m, right axis) €999 per sq m together with Madrid, 350,000 € 3,000 € Barcelona, Alicante and the Balearic Islands, continues to be a safe bet for buyers, 300,000 € sellers and investors. 2,500 € €2,024 per sq m

The city of Malaga is undergoing dramatic 250,000 € €1,750 per sq m changes and is on its way to 2,000 € becoming one of the most significant Spanish cities at €3,092 per sq m 200,000 € m all levels. This deep €1,742 per sq m sq

transformation makes the € 1,500 € €2,731 per sq m €1,786 per sq m capital of the Costa del Sol 150,000 € into a centre of attraction for € per new and ambitious real €3,786 per sq m estate projects, such as 1,000 € Picasso Towers, Urban Sky, 100,000 € Malaca Delta and the future Repsol Towers, signifying the firm commitment of 500 € important developers to this 50,000 € city. €1,314 per sq m Malaga Este Ciudad Jardin Palma-Palmilla The new development - € - € Bailen-Miraflores Cruz del Humilladero Carretera de Cadiz projects in the city are 2014 2015 2016 2017 2018 2019 Rincon de la Victoria Puerto de la Torre-Teatinos Alhaurin de la Torre concentrated in already Source Savills Aguirre Newman Research €1,596 per sq m well-established areas such Source Savills Aguirre Newman Research as Teatinos and its new expansion zone and Colinas New multi-family del Limonar. Meanwhile, of New Projects New luxury supply, rising prices and new residential developments particular note are Avenida What can we expect from the residential in Malaga? de Velazquez and its entire periphery; an area with Malaga’s residential market has Limonar in Malaga Este. Prices contained high demand that continued to grow over the last In 2019, the average price in the La Termica Project Sanchez Blanca Project is undergoing urban few years, brought about by the Supply city grew by 18% compared to the 1An innovative project designed by 3Located in one of the city’s transformation. strong economic situation, the During the last 12 months, the previous year’s figures, reaching the prestigious French architectural natural expansion areas towards growth in tourism and the initial supply was concentrated €307,635, with an average capital firm Francois Leclercq. It includes the Guadalhorce valley, it will significant cultural attraction. in the districts of Puerto value of €2,425 per sq m. various uses alongside the have a public green area of 73,646 de la Torre-Teatinos (2,454 residential, such as retail and offices, sq m. The Sanchez Blanca project 2019 was characterised by the residential units), Carretera de The launch of the Picasso Towers within an island design with large intends to become a technological, launch of large new Cadiz (596 units), Malaga Este project considerably boosted the open areas facing the sea. social, mobility and environmental developments that increased the (462 units) and Rincon de la average capital price of the Carretera reference point. residential supply, in some cases, Victoria (450 units). de Cadiz district, to €3,786 per sq Repsol Project Santa RosalíaProject José Luis Bravo targeting the prime market. The m, placing it in first position in the 2 The central focus of this project 4This project comprises 2.6M Residential coordinator, marketing of all the projects was 2019 maintained the positive city. This is followed by the Centro is a large park which includes VPO sq m, which includes housing, Andalucía aimed at both national and growth of supply in most districts and Malaga Este districts, with housing, open market housing and business and commercial uses. A international buyers. due to the start of new projects, €3,092 per sq m and €2,731 per sq m, commercial spaces. There is a plan significant development made up reaching the same figures in respectively. to construct a massive office park, of three sectors that promise to The new projects were absolute terms as in 2018. making it not only the driving force bring a new area of expansion for incorporated in different parts of Furthermore, the districts that of the city, but also the office centre the city. the Carretera de Cadiz district, The most notable decreases in the recorded the lowest average prices of the Costa del Sol. the central hub of Teatinos and housing supply took place in the were Ciudad Jardin (€999 per sq Images are representative and contain no contractual value the area of Tomillar, along with areas of Bailen-Miraflores (-51%) m), Churriana (€1,314 per sq m) and the upper part of Colinas del and Alhaurin de la Torre (-20%). Alhaurin de la Torre (€1,596 per sq m ). * +10.645 Housing units that make up the major residential projects in the city *Rough estimate savills-aguirrenewman.com/research 4 5 savills-aguirrenewman.com/research New single-family Marketing period

The districts that registered 78% of the new single- the highest initial supply were 78% family housing supply in the 36% Alhaurin de la Torre (36%), city is attached 44% Churriana (44%) and Puerto 17% de la Torre-Teatinos (14%) The sales rates have stabilised but remain moderately healthy. Between 2019 and 2020, a total of 31 projects have been completely sold Distribution of average prices Average new single-family housing prices by district

€1,345 per sq m Multi-family housing

The average percentage sold per 3,8 month €2,895 per sq m €1,329 per sq m The average marketing period 26 (months)

€1,488 per sq m Single-family housing

Centro Malaga Este Ciudad Jardin Palma-Palmilla €1,613 per sq m Bailen-Miraflores Cruz del Humilladero Carretera de Cadiz The average percentage sold per Rincon de la Victoria Puerto de la Torre-Teatinos Churriana 3,4 Alhaurin de la Torre month

Source Savills Aguirre Newman Research The average marketing period 29,4 (months) New single-family Concentration of supply and price growth

Development of single-family housing was (-38%). In contrast, Malaga Este posted a Prices concentrated in the same areas as in previous growth in supply of 87%. The limited supply of single-family housing Stabilised sales rates years. The districts of Malaga Este, Puerto de units led to an increase in the average price, la Torre, as well as those surrounding the city The pronounced drop in the supply (number which stood at €344,011, 25% higher than that The sale of new housing units continues to be stable (Churriana, Alhaurin de la Torre and Rincon of houses) was mainly due to the complete registered in 2018. The average capital value de la Victoria) accounted for the housing sale of the projects marketed during previous amounted to €1,800 per sq m. supply of this type. years, which were not offset by the new projects on the market. The highest average capital values were Multi-family housing project with an average monthly percentage of units Supply registered in the districts of Malaga Este In 2019, positive figures number of 51 units was 26 sold stood at 3.8%. Worth noting is the decline in single-family The largest volume of initial supply was (€2,895 per sq m), Alhaurin de la Torre (€1,613 were registered in terms of months, higher than that housing development in the districts of concentrated in the districts of Churriana per sq m) and Churriana (€1,488 per sq m). number of sales in multi- recorded in 2018 (19.1). Single-family housing Puerto de la Torre (-85%), Rincon de la (145 housing units) and Alhaurin de la Torre family housing. A total of This sales rate, which The average marketing Victoria (-79%) and Alhaurin de la Torre (119 units). 31 projects reached sales already tended towards period for single-family figures of 100% (two less stability, is nevertheless housing was 29.4 months for than in 2018). being maintained within a a standard development of moderate and reasonable 16 units, placing the During the last year, the initial supply was centred in the The average marketing time frame. For the same size percentage of units sold per districts of Churriana, Alhaurin de la Torre and Malaga Este period for a residential of development, the average month at 3.4%.

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

€1,498 per sq m 9,000 Second-hand New development

€2,464 per sq m 8,000

€1,690 per sq m 7,000

€3,172 per sq m €1,718 per sq m 6,000 €3,638 per sq m €1,641 per sq m

€2,414 per sq m 5,000

4,000

€1,982 per sq m 3,000 Number of transactions Centro Malaga Este Ciudad Jardin Palma-Palmilla €1,774 per sq m Bailen-Miraflores Cruz del Humilladero Carretera de Cadiz Rincon de la Victoria Puerto de la Torre-Teatinos Churriana 2,000 Alhaurin de la Torre

Source Savills Aguirre Newman Research | Multi-family housing

1,000 Second-hand New housing developments gain ground over second-hand housing in the city 0 2013 2014 2015 2016 2017 2018 2019

Historically, second-hand housing has been the In January 2019, Savills Aguirre Newman On the other hand, the districts of Ciudad Source Ministry of Public Works | * Q4 (provisional figures) market driver in the Malaga residential market. identified a supply of second-hand homes Jardin, Rincon de la Victoria and Bailen- It was only during 2008 and 2009 when new from 5,500 to 6,000 in the districts Miraflores registered the lowest average developments surpassed this housing type in analysed in line with previous years. prices (€1,498 per sq m, €1,641 per sq m and Over the last six years, the purchase and which are getting an excellent response terms of number of transactions. €1,690 per sq m, respectively). sale of housing units has continued to from demand. Prices grow. Compared to 2013, the number of According to the Q4 2019 data published by Malaga Este, the Centro (old town) Number of transactions transactions completed in this type of However, the economic scenario derived the Ministry of Public Works, the number of district and the Puerto de la Torre- The number of real estate transactions housing remained at 114%. from the COVID-19 health crisis leads us transactions for second-hand units slightly Teatinos topped the ranking of the areas disrupted the upward trend of the second- to predict a temporary reduction in the dropped last year reaching 5,738 deals, with the highest capital values in the hand housing market, keeping prices stable In 2019, second-hand housing accounted for number of deals and a decrease in prices of representing a -49.1% y-o-y decrease, while new city (€3,638 per sq m, €3,172 per sq m and and slightly reducing the number of deals that 85% of the units sold in the city, marking a both new developments and second-hand developments rose by 20.9% compared to 2018. €2,414 per sq m, respectively). were carried out. reduction of four percentage points compared units. This unprecedented situation will to 2018. affect both markets, which in recent years have shown great strength and a tendency With regards to new developments, 2019 towards stability. registered growth figures. There are The number of second-hand real estate transactions has currently numerous projects underway that decreased, continuing the stable trend are already in the pre-marketing phases and

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

Rental markets Distribution of average prices Average rental prices by district Renting, the new front runner in the Malaga residential sector €672 per month

Over the past few years, the long-term market is the construction of a wide range of aspects of this market, with only eight rental housing market has undergone major rental housing stock, with competitive and buildings dedicated to this activity in the changes. The emergence of holiday homes reasonable prices. This model is already being city of Malaga. €848 per month continued during 2019, shifting demand replicated and implemented in other large from the city centre to peripheral zones and Spanish and European cities and is the future Supply districts of the city's metropolitan area. of Malaga. Despite the clear differences found The supply of rental housing is mainly €783 per month between these cities, the rental levels are focused on multi-family units (used as a The enormous imbalance between supply relatively similar. reference to carry out the analysis). and demand, as well as the poor quality of the €952 per month available product, are the main characteristics The city's market continued the trend Savills Aguirre Newman estimates the supply €838 per month of the rental market in the city. observed nationwide during 2019. An of long-term rental housing (including €1.026 per month €771 per month increasing number of households opted for exclusive buildings for rent) is between 1,000 Factors of transformation already detected rental housing, although the limited supply and 1,300 homes, maintaining 2018 levels. years ago, such as the change in mentality makes it extremely difficult to access this €843 per month among young people, job expectations, format. In 2019, the most sought-after areas were the problems of accessibility, globalisation, together Zona Centro and its surrounding areas, with the flow of information and people, are On the other hand, the market is not Carretera de Cadiz and Puerto de la changing the culture of housing ownership, professionalised, as the majority of the Torre-Teatinos. which prevailed until a few years ago. supply is in the hands of private individuals. The scarcity of new developments allocated The trend of relocation from the centre The new reality of the city’s residential for long term rentals is one of the key continues, with the demand looking to move €955 per month Centro Malaga Este Ciudad Jardin Palma-Palmilla Bailen-Miraflores Cruz del Humilladero Carretera de Cadiz Rincon de la Victoria Puerto de la Torre-Teatinos Churriana Alhaurin de la Torre €476 per month Source Savills Aguirre Newman Research | Multi-family housing

closer to the sea or the surrounding vicinity. it remained stable due to the emergence of tourist rentals (short stay) is directing the In spite of this, more people, mainly families demand in even more peripheral areas such as interest of investors towards this business model. with children, are seeking the comfort of Alhaurin de la Torre and Churriana. Although there is a high level of interest from areas such as Puerto de la Torre-Teatinos, the demand side for the supply of buildings Churriana or Alhaurin de la Torre. These During 2019, Malaga Este (€1,026 per month), dedicated exclusively to rent (long-term rental), areas are primarily residential and have a Centro (€952 per month) and Churriana during the last year no building with these wide range of services and transport links to (€955 per month) were the districts with the characteristics was incorporated into the city. other points of the city and the province, as highest rents. Churriana has also recorded However, it is true that small local owners have well as wide avenues, parks and quality the highest rise by 20% compared to 2018 due carried out the construction or refurbishment of public/private schools. to an exponential increase in demand and a buildings of 3 to 5 housing units intended for long very limited supply. term rentals in the areas of Alhaurin de la Torre The boom in tourist housing in the historic and Churriana. centre and the subsequent decline in On the other hand, the most affordable areas long-term rentals have largely led to an were seen in the districts of Alhaurin de la In the city we find only eight buildings of this exodus to other areas of the city. The greater Torre (€476 per month), Ciudad Jardin (€672 type, with close to 100% occupancy, and with profitability on tourist rentals continues to be per month) and Rincon de la Victoria (€771 waiting lists that, in some cases, exceed a year. the reason for this change. per month). In all of these areas there is a need for a greater supply of quality rental Rents housing with less pressure from demand. The shortage of quality supply suited to the needs of demand and the boom in tourist Exclusive buildings for rent housing have contributed to the increase This long-term rental housing type, which in rental price in recent years. Overall, the is more common in cities like Madrid and average rent has grown steadily between 2-3% Barcelona, is still in a phase of growth and per year. However, between 2018 and 2019, consolidation. The excellent profitability of

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Arturo Díaz Ruth Iglesias José Luis Bravo Executive Director Residential Commercial 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]

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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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