Costa del Sol real estate: a decade of growth and a promising 2025 ahead

The Spanish real estate market has reached new historic highs in 2024, driven by strong demand, favorable financial conditions, and a shift in buyer behavior. Among all regions, Costa del Sol continues to be a standout, offering a rare combination of lifestyle appeal and investment value. As we approach 2025, the market signals not only resilience but also renewed momentum.

10-Year Growth Trajectory and 2024 as a Tipping Point

According to the latest data from the Spanish Association of Valuation Companies (AEV), the mortgage property valuation market in Spain achieved record activity in 2024:

+16% growth in valuation volume
+20.09% increase in total valuation value
Average appraised home price reached €247,127 (+3.6% YoY)

This value increase is attributed not just to rising prices, but to a compositional shift: buyers are opting for larger, higher-quality homes, often in high-value coastal regions like Costa del Sol. Over the past decade, this trend has been building steadily, but 2024 marks a peak in both scale and price level.

Mortgage Segment Surges to Record Levels

Valuations for mortgage purposes alone grew by 23% in total value in 2024, reaching 639,000 transactions — almost matching the 2021 peak. This points to:

Stronger confidence from financial institutions
Greater liquidity in the market
Renewed activity after two years of stabilization

Diversified Growth Across Property Types

The report also highlights growth beyond traditional residential appraisals:

Valuations of properties under development increased by 31% in value
New construction valuations rose by 17% in volume
Even rehabilitation projects, though down 4.1% in number, increased by 7.1% in value — showing an upward shift in project scale and ambition

Regional Performance: Where Costa del Sol Stands

While growth was strong across Spain, only three regions saw decline — the Balearic Islands, Castilla-La Mancha, and the Canary Islands. In contrast, Andalusia (where Costa del Sol is located) remained a top performer, buoyed by:

International buyer interest
Second-home purchases
Lifestyle-driven relocation

Key Demand Drivers in 2024

Several structural and behavioral shifts helped fuel this boom:

Lower interest rates encouraged borrowing and refinancing
High internal mobility — driven by lifestyle changes and hybrid work models
Strong demand for quality — a clear preference for coastal, larger, and better-equipped homes
Confidence in long-term value — driven by inflation hedging, rental potential, and global uncertainty

What to Expect in 2025

Looking ahead, the fundamentals remain strong. Here’s what buyers, sellers, and investors can expect:

Continued appreciation in premium zones, especially coastal municipalities in Málaga
Tighter supply in high-demand areas, placing upward pressure on prices
Sustained growth in luxury and new development segments
Ongoing strength in mortgage activity, as rates remain favorable and banks maintain lending appetite

Infographics to Support Market Insight

1. 10-Year Average Appraised Value Trend (2014–2024)

2. Year-over-Year Growth in Mortgage Valuations (2023–2024)

Why This Matters for Costa del Sol Investors

For both lifestyle seekers and strategic investors, Costa del Sol offers:

Proven stability and long-term value
Attractive rental yields, especially in premium areas like Marbella, Estepona, and Benahavís
Demand from multiple buyer segments, including Northern Europeans, digital nomads, and retirees
A market supported by technical valuation rigor, essential for securing financing and managing risk

How Key Real Estates Helps You Navigate This Market

As a trusted local expert, Key Real Estates offers more than listings:

In-depth market intelligence
Tailored investment strategies
End-to-end legal, financial, and rental management
Access to exclusive off-market opportunities

Source: AEV (Asociación Española de Análisis de Valor), 2024 Report on Mortgage Housing Appraisals
Document: Tasaciones hipotecarias de vivienda, 2024