Even though political discussions often focus on taxes for foreign buyers, strict market regulations and sometimes even the “end of the golden era” on the Spanish coast, the reality on the Costa del Sol is quite different. The property market here is not slowing down — quite the opposite. Demand continues to grow, new developments are being launched, and international investors are buying properties faster than they can be built.
Let’s take a closer look at the current situation in the southern Spanish property market and what it means for those considering buying a holiday home or making an investment.
Foreign Demand: Stronger Than Ever
The first quarter of 2025 brought a historic record: foreign buyers purchased 21,525 properties in Spain, representing a year-on-year increase of 19%.
On the Costa del Sol, specifically in Málaga province:
- almost 40% of all properties sold were purchased by foreign buyers
- the most active buyers are British, Scandinavian and Dutch nationals, with Americans also becoming increasingly prominent — up 57% compared with the previous year
- foreign buyers pay, on average, around 40% more per m² than Spanish residents
An interesting fact: the average foreign buyer today is approximately 45 years old. They are often active professionals or entrepreneurs looking for a property that combines part-time living with investment potential and rental income.
A Little History: From Retirees to Digital Nomads
In the 1990s, properties in southern Spain were commonly purchased mainly by British retirees looking to spend their later years in a warmer climate.
Today, the situation has changed. Thanks to technology and the possibility of working remotely, the Costa del Sol has become a destination for:
- digital nomads
- families looking for a second home
- investors focused on short-term rentals
How Much Will Be Built? And Where Exactly?
More than 25,000 new residential units are planned on the Costa del Sol during 2025–2026.
The largest number of developments are concentrated in the following areas:
Mijas — including Mijas Costa, La Cala and Las Lagunas
More than 450 units are currently under construction or in planning:
- “Savia” by Grupo Insur: 140 townhouses within a residential community
- a further 142 apartments in various stages of planning
- Green Homes: 80 homes close to the beach
- La Cala Golf: Taylor Wimpey
Developer Taylor Wimpey Spain, in cooperation with the resort owner FBD, has started construction of Phase 1 of a luxury development within La Cala Golf Resort.
- 26 three-bedroom townhouses
- Phase 1 investment: €12.5 million
- Expected completion: October 2026
- Prices from: €620,000
- The project forms part of a 600-unit masterplan for La Cala Resort, with further phases expected to follow
- 67% of buyers are British, typically aged 45–59 and often purchasing with their partners; demand is also growing among Dutch, Czech and American buyers
- The development focuses on luxury, low-maintenance living, suitable both for permanent residence and rental purposes
Málaga City – Térmica Beach
A project by Aedas Homes:
- 400 privately owned apartments focused on tourist accommodation
- an additional 273 affordable housing units as part of the social housing component
- location: western Málaga — a new “urban Golden Mile”
Estepona and Marbella
- 179 new units in Estepona
- 80 new apartments in Marbella
- planned luxury residences comprising approximately 100 units as part of the Palya Invest project backed by Rafael Nadal and Abel Matutes
Torremolinos & Benalmádena
- Kosmos and The Kove developments by Kronos Homes: approximately 270 units in total
Comparison with the Past: More Than Just a “Boom”
In 2015, approximately 7,000 new residential units were built annually on the Costa del Sol. By 2025, the planned number is roughly three times higher.
What does that mean?
| Year | Number of new homes on the Costa del Sol |
|---|---|
| 2015 | ~7,000 units |
| 2020 | ~12,000 units |
| 2025–2026 | ~25,000 units |
Prices and Rental Yields
- Property prices in Málaga province increased by 13% in 2024
- A further increase of approximately 10% is expected in 2025
- Rental yields remain highly attractive — approximately 5–8% annually for properties with a short-term tourist rental licence (VUT)
Buying a property off-plan often offers a more attractive purchase price, the opportunity to choose one of the best available units and modern specifications suitable both for personal use and future rental.
It is clear that interest in the region is not fading. Developers are trying to keep pace with demand, although lengthy approval procedures and a shortage of developed land frequently limit the speed at which new supply can reach the market.
What About Restrictions and Newly Proposed Taxes and Charges for Foreign Buyers?
Yes, proposals have been discussed that could include:
- higher taxation for non-EU buyers purchasing second homes
- possible limits or quotas on property purchases in areas experiencing particularly high demand
However:
- these measures are currently only proposals and have not been approved
- the restrictions would not apply to EU citizens
- most experts expect that any eventual measures would be more symbolic than something capable of having a major impact on the market
Investors therefore have little reason for concern, as the market remains open and attractive.
Summary: Why Investing on the Costa del Sol Still Makes Sense
- Demand is historically high and increasingly diverse, extending beyond retirees to younger, economically active buyers
- The supply of new-build properties is increasing, but still struggles to keep pace with demand, supporting further price growth
- Rental yields remain attractive, particularly for properties eligible for a VUT tourist rental licence
- Despite ongoing political discussions, the environment for international property investors remains stable, secure and predictable
