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House prices in Málaga are going through the roof, and buyers are struggling to keep up

Vélez-Málaga and Marbella see biggest hikes as homeownership gets tougher

Buying a home in Málaga has always been a challenge, but for many, it’s now becoming nearly impossible. According to the latest data, families in the area are stretching their budgets more than anyone else in Spain, with mortgage payments eating up a staggering 59% of their disposable income in the first quarter of 2025. That’s way above the national average of 34.9% and even surpasses traditionally expensive areas like Madrid and Barcelona.

The figures, published by Tinsa, highlight just how quickly house prices are climbing, particularly in popular coastal areas like Vélez-Málaga and Marbella. These two municipalities have seen the largest spikes in the country, with property values jumping by 17.6% and 15.9%, respectively, compared to the same period last year.

It’s not just Málaga that’s feeling the pinch. All over Spain, house prices have risen 7.5% year-on-year, pushing the average cost per square metre to €1,902. The steepest rises have been recorded in tourist destinations and employment hotspots, where demand is way ahead of supply. Madrid leads the way with a 15.1% jump in property values, while Málaga sits in seventh place among Spanish cities, with a 10.4% increase.

The price surge isn’t only affecting those looking to buy. With new-builds becoming less and less affordable, demand for second-hand homes is driving prices up across the board. This is putting pressure on the rental market too, making it harder for renters to find something within their budget.

Despite all these challenges, demand remains strong, partly thanks to lower interest rates and easier access to credit. There’s also a notable rise in cash buyers, with around half of all property transactions now taking place without a mortgage.

Experts warn that the biggest issue is the shortage of available housing in popular areas, particularly along the Costa del Sol. "There simply isn’t enough supply to meet the demand," explains Cristina Arias, director of the Tinsa Research Department. "In some cases, there’s also a concentration of buyers with higher purchasing power than the local population, further driving up prices."

Looking at Andalucía as a whole, property prices have increased by 6.6% in the past year, reaching an average of €1,630 per square metre. Within the region, Málaga has seen the fastest growth (12.5%), followed by Cádiz (7.6%) and Granada (5.8%).

As for the future, the big question is whether the housing market can catch up with demand. Experts point to slow planning processes, labour shortages, and financing difficulties as major roadblocks to increasing supply. Unless something changes, property prices could continue their upward spiral, leaving many locals struggling to afford a home in their own cities.

Image Bráulio jardim/Pexels

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