Malaga leads Spain’s luxury property market amid strong foreign demand

Malaga province anchors the luxury residential market in Spain through its axis known as the Golden Triangle, comprising Benahavís, Estepona, and Marbella. A leading company advising high net worth clients notes that Malaga currently hosts 2,500 homes valued above three million euros, accounting for 34 percent of the identified national stock and surpassing 7,000 units overall.

Following Malaga, the Balearic Islands hold 33 percent, Madrid 10 percent, and Barcelona 6 percent. A commissioned analysis by Hiscox and conducted by a global real estate consultancy shows these four regions together make up 80 percent of Spain’s luxury housing supply. The study also highlights the extensive reach of the luxury market across the country as it maps the scale of high-end properties.

Spain saw luxury transactions above three million euros rise by 55 percent in 2022 versus 2021, a growth rate that had doubled from 2019 before the pandemic. Since 2019, prices for such homes have risen by roughly 10 to 20 percent depending on region. The luxury segment represents about 5 percent of Spain’s total housing market, and despite Covid-19 disruptions, buyer demand in this segment remained resilient, with the market recording more than 8,000 transactions in a stronger year.

In a climate of global uncertainty, high inflation, and asset value adjustments, one segment continues to draw investors: luxury living. The sector holds up better than many others because it tends to be less exposed to these macro factors, according to Hiscox.

At the end of 2022, Malaga logged nearly 2,900 transactions above three million euros, representing 36 percent of the national total, with average prices between five and 5.9 million euros.

In the Balearic Islands, close to 2,300 such luxury home transactions were recorded. Madrid processed about 900 deals, most with average prices ranging from 4.7 to 5.1 million euros, while Barcelona registered around 500 transactions at an average value between 4.8 and 5.3 million euros.

The foreign buyer is the main client

Hiscox notes that Malaga has long been a preferred destination for British buyers seeking luxury homes in Spain. Despite Brexit, British buyers continued to represent the majority of foreign demand, not only nationally but also in the province itself.

The British market remains strong, accounting for about 20 percent of transactions closed with foreign participation. French and Northern European buyers, including Swedes and Belgians, are growing in share, with German, Austrian, and Dutch buyers increasingly visible as well.

Among domestic buyers, residents of Madrid stand out as the strongest group for luxury homes that Marbella has become a preferred residence for many, especially as remote work flexibility rose in the wake of the pandemic.

“In a period of uncertainty, inflation, and falling asset values, there is one segment that consistently attracts investors: living. The luxury segment fares better because it is less exposed to these factors.”

For years, Malaga has hosted a very robust local luxury market, with foreigners accounting for around 90 percent of purchases in this segment. Marbella draws buyers from Sweden, France, Norway, and Belgium, with the United Kingdom continuing to be a major source of high-value purchases above three million euros.

A luxury home in the Nagüeles district of Marbella illustrates the profile of these properties.

Typical luxury buyers in Malaga skew toward ages 40 to 55, reflecting the profile of seasoned investors and high-net-worth individuals seeking second homes or primary residences in this coastally appealing region. Marbella and Benahavís remain the most sought-after luxury areas in the province, with Marbella’s Golden Mile and La Zagaleta, along with El Madroñal in Benahavís, among the top high-value zones including Las Lomas, Puente Romano, Lomas de Rio Verde, Puerto Banús, Las Brisas, and Los Monteros.

Spain ranks as a leading investment destination

Globally, the United States leads as the most attractive destination for luxury real estate investment, followed by the United Kingdom, Australia, and Spain, which occupies the fourth position. Spain is viewed as a safe destination for establishing a second home along the coast, particularly for buyers from the United Kingdom, Germany, France, Latin America, Russia, and China.

British investors continue to command a significant share of foreign luxury transactions, representing around 20 percent of the total in 2022. Eva Peribáñez, director of Art and Private Clients for Hiscox Spain, notes that the luxury real estate market remains buoyant, with more high-net-worth clients choosing to invest each year, driving ongoing market growth.