Malaga increase

For the first time since the crisis began, the statistics for the struggling Malaga property sector have shown some improvement. In the first nine months of this year, home sales have managed to break the negative trend of the previous four years, growing by 3.5% over the same period of 2011.

According to the Ministry of Development, a total of 12,692 homes built in the Malaga province found an owner between January and September, which was nearly a third of all the homes sold in the whole of Andalusia.

This is why, despite the current difficult situation, Malaga remains one of the provinces with most real estate activity, this year being ranked as the fourth largest, behind Madrid, Barcelona and Alicante. This is partly due to the pull of foreign demand, which accounts for a quarter of the homes sold and which is growing at a rate much higher than that of domestic demand.

Violeta Aragón, the General Secretary of the Malaga Association of Builders and Developers (ACP), welcomed this turnaround with a mixture of optimism and caution, saying “Something is moving, the proof of which is that, by our calculations, the ‘stock’ has been reduced to 15,000 homes”. Aragón said that there are two emerging trends which explain this surge in demand. On the one hand, “transactions are being brought forward, since on 1st January 2013, VAT on housing is to rise and tax allowances are to be eliminated,” she explains. This advance purchasing may be followed by a new slump next year, so builders are not confident that domestic demand will sustain a strong recovery in the sector in the short term.

In contrast, foreign demand is registering continuous growth, which the ACP is confident will be maintained or even intensify in 2013. Between January and September this year, 3,099 real estate transactions were signed in the province with non-Spanish buyers, which is 8.7% more than in the same period of 2011. These transactions were focused mainly on homes on the coast.

Emerging Markets

According to data held by the ACP, buyers from the United Kingdom still maintain the lead in foreign demand, accounting for 30% of home sales to foreigners. The Nordic countries came next, which together account for 20% of sales, then Germany with 9%. With smaller percentages, but growing, are the so-called emerging markets, particularly Russia, which already accounts for 5% of the homes sold to foreigners.

Diario Sur reported that the behaviour of the new and the second hand housing markets is also inconsistent: new home sales are still falling (by 17%), while sales of second hand homes rose by 11%, representing almost 80% of total sales.

By municipalities, sales have risen especially in Manilva (where they have doubled) and Estepona (16.4%). They have also increased, although by less, in Fuengirola, Marbella, Mijas and Torremolinos. In contrast, still in free fall are Malaga capital (with 17.4% fewer homes sold) and Vélez-Málaga.