Your Personal Guide to Exclusive Living

The property market, like everything in life, runs in cycles—booms followed by lulls, and then often a fresh upswing. After several consecutive years of robust growth on the Costa del Sol, with high demand fuelling strong price rises, some are now asking: are we approaching a bubble?

What's Driving Demand in 2025?

In a word: confidence. But the story goes deeper.

Tourism is breaking records, and Málaga province is a magnet for international buyers looking for both second homes and permanent residences. Buyers aren’t just wealthy retirees anymore—we’re seeing younger professionals, families, and digital nomads. On the domestic front, a stronger economy is enabling more Spaniards to step onto the property ladder, expanding the buyer pool even further.

Marbella and its surroundings continue to attract high-net-worth individuals from across Europe. In contrast to the city centre markets of Málaga, where younger buyers are pushed to outlying suburbs like Torremolinos and Benalmádena, the Marbella market remains buoyed by cash-rich international buyers. It’s this sustained demand, paired with relative scarcity, that’s driving our forecasts.

Price Outlook for 2025 , Let’s talk numbers.

Based on current trends and data, we expect prices for *resale properties* to rise between from 8% to over 20%, depending on location and quality. The luxury segment, naturally, will see higher gains.

But the most notable growth will be in *new-build properties*, where we’re forecasting 15% to 20% increases. This is largely due to surging construction costs—driven by land prices, labour shortages, and material inflation—combined with the steady stream of buyers hungry for turnkey homes in desirable locations.

Mortgage conditions are also improving, with loan-to-value ratios rising to 80% and interest rates beginning to dip closer to 2%, another key tailwind for price growth.

Supply is Catching Up—But Not Yet

One positive sign for long-term balance is the uptick in new developments. In 2024, over 8,900 new properties were approved in Málaga province—a 27.5% increase from 2023. This is encouraging. But supply growth still lags demand, meaning prices will likely continue rising into 2025.

By 2026, however, we expect the pace of growth to slow. As more inventories comes to market, we should see a gradual easing of the upward pressure on prices. That’s good news. A healthy market doesn’t mean runaway growth—it means sustainable, manageable expansion.

The Rental Landscape: A Shift in Strategy

Investors should also note a shift in rental regulations. While there’s a push to limit short-term tourist lets, recent legislation now gives homeowners more power to evict squatters and protect long-term leases. The result? A more attractive environment for long-term buy-to-let strategies.

This shift is important because it signals a maturing market—one where property isn’t just a speculative asset, but a stable, income-generating investment.

Final Thoughts

All indicators point to 2025 being another strong year for the Costa del Sol property market. We’re not in a bubble. Demand is real, supply is catching up, and the market is evolving in a way that favours both homebuyers and investors alike.

At Sandtons Property, we’re here to help you navigate this dynamic landscape with confidence. Whether you’re buying your dream home, securing a long-term investment, or simply exploring your options, we’ll ensure you make informed, strategic decisions.

2025 won’t be the peak. It’ll be a step forward in a market that’s healthier, stronger, and more resilient than ever.