Average house prices in Malaga have continued to rise in this third quarter of 2022 in a scenario of huge demand from buyers, who in recent months have also accelerated their purchases to avoid the rise in interest rates and Euribor . So the breakneck pace of buying and selling (deal numbers are at a 15-year high) has caused prices to continue to rise, with a 1.4% rise added throughout the third quarter in the case of the city and 1.1%% in the province, which places the year-over-year increase at 6.2% and 5.2% respectively, according to the latest study on the province’s real estate market published by the Urban Environment Observatory (OMAU)organization dependent on the City of Malaga.
In real figures, and according to OMAU, the average price level of new homes for sale is 3,546 euros per square meter (VAT included) in the capital and 3,269 in the provinces. These values would already exceed those of the real estate boom era, although mainly due to the attraction and market weight of the municipalities of Malaga and Marbella, leaving many other towns still below these values.
By geographical area, the West Coast is evolving at 3,414 euros, leaving the East Coast (2,216) and the interior of the province (1,907) far behind. OMAU carries out its price study on the basis of visits and surveys of new real estate developments currently being marketed.
OMAU estimates show that the difference between formalizing an average mortgage of 180,000 euros over 25 years last spring and doing it today already supposes for the purchaser an additional cost of around 1,500 euros per year due to higher financing costs. The Observatory also recalls that the general rise in the Euribor, which in a few months has increased by practically more than two and a half points (it was -0.502 in December 2021 and in mid-September 2022 it reached 2.156) favors fLarge increases in the revision of variable rate mortgages. Indeed, an average mortgage of 150,000 euros over 25 years reviewed this month would have an increase in your monthly plan of more than 180 euros per month.
This whole situation, in the opinion of OMAU, could soon have an influence “in the weak demand for the purchase of habitual residences by families, not so much in the housing market as as an element of investment”. The director of OMAU, Pedro Marín, explains to this newspaper that the real estate market in Malaga is divided about evenly between main residence buyers and others with a more investor profile.
The very high values of certain promotions continue to significantly pull market averages. The highest year-over-year price increasesin the case of the capital, occur on this occasion in the Rosaleda region (9.1%), probably because of the towers that stand in Martiricos. In the East Coastvalues have increased over the past year a 8.47% while in the west facade (which has high-level projects in the field of Thermal), show an increase 8.45%.
For its part, Teatinos maintains a “moderate” price increase (3.3%), Yes Puerto de la Torre and Campanillas (both slightly above 6%) “They are consolidating like the new growth poles in continuity with the main expansion of the city“, explains the Observatory.
The most expensive houses in the capitalIn any case, they remain those of the east coast, with average prices of 5,282 euros per meter, followed by the west coast (4,835) and the Center (4,305). In Teatinos, they are on average 2,830 euros.
In the rest of the province, year-on-year increases in nerja (6.1% for a total of 3,603 euros per meter on average), Torremolinos (5.3% and 3,123), corner of victory (5.05% and 2,154) and Mijas (5.02% and 2,982). Marbella is the most expensive city of the province, with 4,623 euros per meter on average and an increase in twelve months of 4.4%.
VPO promotion, Andalusian housing law and rent control
As for the promotion of new housing, OMAU once again regrets that VPO continues to post negligible levels within the market. This year they represent only 6.2% of all approved projects and in previous years the percentage was practically non-existent.
“It has already been pointed out several times the need to provide VPO housing on a massive level, not only by the public administration, but also by private companiesalthough this implies a new update of the modules”, he comments. OMAU cites the case of Malaga capital as a “good example” of a municipality that has historically promoted housing since the IMV (5,524 homes since 2000 and plans to develop 1,200 new homes), compared to what he describes as “simply symbolic” number at the same time by the Junta de Andalucía.
The Observatory thus qualifies as “contradictory” that the one who holds the powers, the Junta de Andalucía, “does not develop the necessary and urgent housing policyand the city council must replace it not on an ad hoc basis, but on a structural basis, as the historical data indicates”.
On the other hand, OMAU considers that the new housing law “is made with a capital delaywhen your need is emergency for hundreds of thousands of families and young people who want to emancipate themselves with dignity. And he also mentions the problem of rental, a market where prices have also exploded.
“The rental price control which has been successfully developed in other countries for tenants is precisely criticized for putting obstacles in the way of investors and theoretically reducing their returns. In reality, it’s about seeing housing as a necessity or just a business, two parallel worlds that don’t seem to have a connection, even though they could and should be balanced. Hence the need for administrative intervention to recover lost balanceswhat economic policy has reasoned since the days of Adam Smith and his Wealth of Nations,” he concludes.