Costa del Sol Property Outlook 2025-2026

Eva Brown
Jun 10
3 min read

With all the buzz about tax hikes, political ups and downs, and market challenges, some investors might wonder if Spain, especially the Costa del Sol, is still a safe bet. The truth is, Spain's southern coast is not just stable, it's booming.

Let’s break down what’s actually happening in the market: where new homes are being built, how foreign demand is evolving, and why Costa del Sol is still one of Europe’s best second-home destinations.

Foreign Demand: Still Growing, Still Strong

In Q1 2025, foreign nationals purchased over 21,500 homes in Spain, setting an all-time record, up 19% year over year.

In Málaga province (Costa del Sol):

Nearly 40% of all property sales were to foreign buyers
Leading buyers: British, Dutch, Scandinavians, Americans, and investors from the Middle East
Foreigners pay on average 40% more per square meter than Spanish residents

Fun fact: The typical foreign buyer today is no longer retired, they’re around 45 years old, often professionals or entrepreneurs looking for a blend of lifestyle and rental income.

Then vs. Now: From Retirees to Remote Workers

In the 1990s and 2000s, Spain’s southern coast was a magnet for retirees, especially Brits seeking warm weather and affordability. Today, Costa del Sol attracts a very different crowd:

Digital nomads and remote professionals
International families seeking a second base
Rental-focused investors targeting VUT licenses

What’s Being Built — and Where?

Over 25,000 new residential units

are planned on the Costa del Sol between 2025 and 2026.

Here’s where the biggest developments are happening:

Mijas (Mijas Costa, La Cala, Las Lagunas) 450+ units

Grupo Insur’s “Savia”: 140 semi-detached homes with community wellness areas
Additional 142 modern apartments and villas in planning
Green Homes: 80 townhouses near the beach

A favorite for buyers seeking relaxed beach living with strong rental potential.

Taylor Wimpey – The Meadows:
Taylor Wimpey Spain, in partnership with FBD (owner of La Cala Golf Resort), has begun construction on the first phase of a premium development:
- 26 exclusive 3-bed townhouses
- Investment: €12.5 million in Phase 1
- Delivery: October 2026 (Phase 1)
- Prices start from €620,000
- It’s part of a 600-unit master plan at La Cala Resort, with more phases to follow
- Buyers are primarily British (67 %), aged 45–59, many with spouses, though demand is growing among Poles, Czech, Dutch, and Americans.
- The focus is on luxury, low-maintenance homes ideal for second living or rentals.
If you’re looking for a luxury second home or investing in rentals, “The Meadows” ticks all boxes: premium build, A-rated efficiency, top-tier resort amenities, and high potential appreciation. Prices start at €620,000 — aligning with mid‑luxury segment demand, especially among foreign buyers.

Málaga City – Térmica Beach – 670 units

Aedas Homes’ seafront mega-project:
- 400 private apartments
- +273 affordable units
Located on the “new Golden Mile” of western Málaga, designed for modern urban lifestyle

Estepona & Marbella – 250+ new units

179 new apartments in Estepona and 80 in Marbella from Grupo Insur
Palya Invest (by Rafael Nadal & Abel Matutes): 100 beachfront luxury residences, to be completed between 2027–2028

Torremolinos & Benalmádena Corridor

Kronos Homes:
- Kosmos (104 units)
- The Kove (166 units)
Designed for second-home and rental buyers seeking amenities and views

Historical Growth Comparison

Year	New Homes on Costa del Sol
2015	~7,000 units
2020	~12,000 units
2025–26	~25,000 units

Key takeaway: Although supply is increasing, it is not matching the rising national and international demand, resulting in higher prices and rent.

Prices & Returns

13% price growth in Málaga in 2024
10% expected increase in 2025
Rental yields remain attractive 5–8% annually with short-term tourist licenses (VUT)

Buying off-plan often gives you a better price, first pick, and modern finishes ideal for resale or rental.

What's the Deal with Foreign Buyer Restrictions?

Yes, there’s talk in the Spanish government of:

Increased taxes for non-EU second-home buyers
Possible local quotas or housing access limits

But:

Nothing is approved yet, these are only proposals
EU citizens are unaffected
Even if passed, experts expect minimal real impact on serious buyers and investors

So no, you don’t need to panic or delay if you’re planning to buy.

Reasons Why Costa del Sol Remains a Smart Choice in 2025

Record-high demand from international buyers across ages and budgets
Huge wave of new, high-quality construction in prime locations
Rental demand is strong, and the infrastructure supports year-round use
Despite politics, Spain remains transparent, investor-friendly, and EU-regulated