Costa del Sol Real Estate Market: Negotiation Opportunities and Price Trends
In recent years, Spain’s Costa del Sol region has gained increasing popularity among both local and international buyers. The area's pleasant climate, rich culture, and excellent infrastructure make it an attractive choice for a second home or permanent residence. The continuous growth in demand has significantly influenced the real estate market, leading to rising prices. Foreign buyers, particularly from Northern Europe and the Middle East, are increasingly present, further strengthening the market. But how have property prices changed in recent years, and is there room for negotiation when purchasing a property?
Changes in Property Prices Over Recent Years
Real estate prices in Costa del Sol have been on a steady rise, especially since 2020. Foreign investments, a tourism boom, and low interest rates have all contributed to this trend. In 2024, the average price per square meter in Málaga province reached €3,397, compared to approximately €2,500 in 2019. This demonstrates that prices have increased by 30-40% in just a few years.
Different cities have experienced varying levels of price increases. In exclusive residential areas of Marbella and Benahavís, price per square meter has surpassed €10,000 in some cases. Meanwhile, in cities like Fuengirola, Torremolinos, and Benalmádena, the average apartment price has risen from €200,000 to well over €300,000 in recent years. Newly built properties in Estepona and Mijas have also seen significant price hikes, with some projects now exceeding €5,000 per square meter.
The price of new developments has risen sharply, as developers take advantage of high demand by selling properties at increasingly higher prices. In some cases, apartments are fully sold out even before construction is completed, leaving no room for price negotiations.
A Stable and Highly Sought-After Market
The stability of the Costa del Sol real estate market is largely due to the region’s long-standing appeal to foreign investors. Properties in this area tend to retain their value, and the continuous demand makes long-term price growth likely. Cities such as Marbella, Estepona, Fuengirola, and Benalmádena have particularly active housing markets, attracting investors who seek reliable returns.
One key factor behind the market’s stability is tourism. Since Costa del Sol is a year-round popular destination, the income potential from short-term rentals makes investment properties highly attractive. Furthermore, Spain's economic stability and the favorable legal environment for foreign buyers contribute to the strength of the real estate market.
Negotiation Opportunities
Price negotiations in Costa del Sol’s real estate market are becoming increasingly rare due to high demand. Sellers often refuse to lower prices because if one buyer attempts to negotiate, there is usually another ready to pay the full asking price.
Examples of Negotiation Possibilities and Limitations
A villa located in the exclusive area of Marbella, valued at 2 million euros, is highly sought after, so the property could sell at full price almost immediately. In this case, the seller is unlikely to accept an offer for a 5% discount, as the demand in the market and the prime location of the property do not justify such a reduction. A similar situation can be observed with new developments in Fuengirola, where developers apply predetermined fixed prices and are unwilling to offer discounts, as the demand remains strong and properties are quickly sold. For example, new two-bedroom apartments in Fuengirola typically sell for between 600,000 and 700,000 euros. This is illustrated by the case of a used 450,000-euro apartment located in Estepona, near the city center, which also sold at full price. The demand was so strong that multiple potential buyers competed for the property, preventing any price reduction.
When Is Negotiation Possible?
Although price reductions are uncommon, there are specific situations where buyers might secure a better deal. Properties that have been on the market for a long time may have sellers who are more willing to negotiate, particularly if the listing has not received much interest for months. In urgent sales situations—such as due to divorce or financial difficulties—sellers may accept lower offers. Additionally, cash purchases can sometimes result in a discount, as they offer a quicker and more secure transaction for the seller.
In such cases, it is advisable to seek the assistance of a real estate expert who understands the market, seller expectations, and potential negotiation opportunities.
Costa del Sol’s real estate market has experienced dynamic growth in recent years and remains a highly sought-after destination for buyers and investors. Due to high demand and rising prices, negotiations are becoming increasingly rare, but under certain conditions, they are still possible. Those looking to purchase property in this area would benefit from consulting an experienced professional to secure the best deals and navigate the realities of the market.