Summary of Costa del Sol property market 2023

You don’t need to be a property expert or financial analysts to know that the reputation of Marbella, and by association the wider Costa del Sol, appears to be on an upward trajectory. If you check your newsfeeds, you’ll see a plethora of articles suggesting Marbella has not only retained but also burnished its crown as the must-do destination for luxury real estate.

Over the last few years there has been substantial investment in upgrading and launching new premium hotels. Notable examples are the 31€ million upgrade of the Hotel el Fuerte Marbella and the arrival of La Fonda Heritage in Marbella’s Old Town, the first Release & Chateaux hotel on the Costa del Sol. Add to this the collaborations between developers, beach clubs and big name fashion designers, such as Karl Lagerfeld, Dolce & Gabbana and Fendi.

With this in mind, we feel that the real estate market on the Costa del Sol 2023 requires much closer examination in order to provide real estate investors and those looking to buy homes, with the bigger picture. To provide some context here is a brief summary of the Spanish economy.

One of highest GDP growth in Europe

Spain enjoyed 5.5% GDP growth in 2022, one of the highest rates in the EU. In March 2023, the Bank of Spain predicted this year’s growth to be around 1.6%, as compared to the EU average of 1.4%, which are considerably higher than the previously forecasted rate of 1% growth. The inflation rate for Spain was pegged at 3.3%. which is the lowest it has been since August 2021. However, inflation is forecast to rise, with the main driver being global events leading to rising fuel and food costs.

Luxury home purchases unaffected by interest rates

The Euribor interest rate is currently hovering just below 4% and is expected to reach this benchmark by the end of the year.  Again, the situation in Ukraine is having a destabilising effect on the Eurozone and global economies. According to Malaga Property Observatory, OMAU this has resulted in a decrease in the number of mortgages and a rise in the cash purchases (around 45%) which shows that the luxury real estate market has not been affected by higher interest rates.

Property sales on the Costa del Sol 2023

Without further delay here are the figures that real estate agents and property buyers are most interested in: the Costa del Sol property sales figures for 2023 (so far). Statistics provided by INE (Spanish Statistics Institute) that the number of property sales in Málaga Province between April and June 2023 saw a 4.3% drop, compared to the first quarter. 

According to Tinsa, Málaga saw the third highest number of sales throughout Spain, behind the capital Madrid and Barcelona (which are also the two most expensive markets). Málaga registered 43.4% of sales per 1,000 properties, whereas the national average is 26.9% sales per 1,000 properties on the market. Idealista also reported that an impressive 20% of properties for sale in Málaga (listed on the Idealista property portal) were purchased within just one week (the national average is 12%).

Property prices on the Costa del Sol

Tinsa also reported that property prices on the Costa del Sol increased by 7.5% during 2022, which equates to a 1.2% quarterly increase – the highest it has been for over 15 years. Average prices on the Costa del Sol are now only 22.6% lower than at their historical peak in 2007. Idealista reported that the average property price (based on asking price in the first half of 2023) as being 2,849€ per square metre, which represents a substantial 13.9% increase on the previous year. This is one of the highest price increases in Spain, proving yet again that Marbella and the greater Costa del Sol are still hugely attractive for property investment.  

Costa del Sol’s 5 most expensive areas

There are five specific areas which have exceeded the price average on the Costa del Sol. These are Manilva (18.8% to 2,149€m²), Marbella (18.6% to 4,138m²) and Estepona (19.3% to 2,993€m²). Although not reaching double-digits, Benahavís, also saw an impressive rise of 7.5% resulting an average price of 3,981€m² and Sotogrande’s average price increased by 7.8% to 2,723€m².  All of these areas have also seen strong growth, particularly Marbella which saw an uptick of 4%.

Long-term price rises

According to Euroval valuations specialists, the Spanish property market as a whole can expect an average increase of 6% between 2023 and 2025. Málaga province is forecast to see the largest increase of up to 8.46%, followed by Madrid and Barcelona with increases of 5.28% and 2.96% respectively.

Rental price increases on the Costa del Sol 2023

Idealista has found that the number of long-term rental properties available on the Costa del Sol had fallen by 15%. In Malaga city, the demand is even higher, during the first half of 2023 there were 27% fewer rental properties available compared to the previous year.  According to research by Gesvalt valuation services, by the end of March 2023 rental prices saw an increase of 14.7% compared to the same month in 2022.  In Marbella, rental prices rose by 22.1% and in Estepona rates increased by an incredible 34.9% over the last 12 months.

Tinsa gross rental yields

Property investment for the rental market on the Costa del Sol is still an extremely savvy financial move. Tinsa Q2 2023 figures show that gross rental returns are looking extremely stable, with Malaga averaging 4.4%, compared to Madrid with an average of 4.3%. Idealista reports that average rental rates in Málaga city have shot up between August 2022 and September 2023. Within these cities, the suburbs show lower prices yet higher returns, whilst conversely the city has higher prices yet more subdued returns.

Property affordability rates in Spain

To get an overview of the Spanish market during the first quarter of 2023, we’ll start with Tinsa’s analysis of the registered rates of affordability. The three provinces that registered higher rates: Balearics, Malaga and Madrid, have strong demand which means more pressure on the price of land and property, which makes these regions less affordable.  Research shows that households in these areas need to spend over 35 percent of their income on mortgages. The three least affordable regions of Madrid, Barcelona and Malaga (Costa del Sol) offer the best property investment opportunities and have dynamic job markets and higher levels of wealth which attract foreign buyers. Similarly, the increase in city breaks, perennial penchant for beach holidays and the demand for second homes are driving the property investment markets and subsequently affordability.

International property buyers

Foreign buyers have been an integral element of the Costa del Sol property market and have continued to do so in the first quarter of 2023. The OMAU has published figures suggesting that overseas buyers account for 33.31% of the entire Costa del Sol property market, 5% higher than in Q2 2019.  


Forecasts for the remainder of 2023 are expected to be slightly more subdued than in the first quarter. However, prices are expected to continue to rise due to continued interest in Costa del Sol real estate from international buyers and investors and the limited available housing stock.  Tourism is also a factor, currently numbers are at an all-time high. In Q2 2023, Malaga International Airport registered 6,351,715 passengers with represents 17.20% increase in traffic.  In Q1 2023, the airport had already seen a 9% more increase on the pre-pandemic figures of 2019.

The majority of analysts suggest that Spain is heading in a positive direction with slow and steady progress, however the Costa del Sol will continue to move at a faster speed and is expected to see more dramatic upward trend in sales.


If you would like any further advice about the Norestates real estate services or the stages of buying a home in Spain, please contact us on or call +34 600 224 087 / + 34 951 319 178.