Why is the luxury property market booming in Malaga province and is a bubble forming? Property expert Adam Neale gives his verdict

I HAVE noticed a strong trend in recent years, accelerating since the pandemic, for Marbella to become a destination of choice for luxury home purchases.

It seemed to me that luxury home sales and purchases were becoming a growing part of the overall real estate market.

This was largely a phenomenon that was anecdotal, based on my experience. I wanted to confirm whether it was actually the case and not just my perspective, so I dug into the numbers.

READ MORE: Spain’s real estate sector is crying out for better standards, writes Adam Neale

Puerto Banus, Marbella


The luxury real estate market in this country has experienced considerable growth, with high-net-worth individuals investing more in this segment.

Prices in the country’s luxury real estate market have increased by 10-20% in the past two years, according to Hiscox.

Transactions for homes over €3 million increased by 55% in 2022 over 2021, with over 8,000 transactions registered last year, mainly in Barcelona, Madrid, the Balearic Islands and Malaga province.


In fact, Malaga leads the luxury real estate market, with 2,500 homes for sale above €3 million, representing 34% of total luxury home sales in Spain. The vast majority of these high-end homes are located in the so-called ‘golden triangle’, formed by Benahavis, Estepona and Marbella.

The rise in luxury housing has significantly impacted real estate prices in Marbella. Across all categories in Marbella rose by about 15% between June 2022 and June 2023. In fact, the average asking price reached €4,461 per square metre in December, which is more than double what it was 10 years ago.


A significant part of Marbella’s rise is a result of the paralysis that exists with regard to zoning. Marbella hasn’t had a zoning bylaw for over a decade now, and that has caused a shortage of available housing that will take years to work through, even though the zoning impasse should be sorted out this year.

However, another part of the price increases comes from Marbella’s attractiveness as a destination for high-net-worth individuals. They can see the luxury, infrastructure, amenities and are drawn to Marbella. Like attracts like. And pristine beaches and plentiful golf courses help too.

So, what does this mean for us mere mortals who aren’t movie stars or oil sheikhs or jet-setting billionaires?

The growth in the luxury market in Marbella and the Costa del Sol is generally a good thing. However, it is not without its drawbacks. Price rises in both rental and purchase prices make housing less affordable to those who aren’t wealthy.

On the other hand, Marbella, being a destination for luxury seekers, provides work as well as improvements to the local infrastructure that benefits everyone.


Nobody wants a bubble. The last one in 2007 ended very badly. But what is happening in Marbella is not, I’m convinced, a bubble. Prices remain 22% below 2007 highs on the Costa del Sol. The restoration of a functioning zoning regime in Marbella will also ease, naturally and gently, the upward pressure over the course of the next couple of years.

Marbella and the so-called golden triangle are definitely experiencing the virtuous circle of an influx of luxury buyers, along with improved infrastructure from growing tax revenues.

It is true that we need more long-term rental options, and I hope that the regional government of Andalucia offers incentives to the many excellent developers along the Costa del Sol.

But even with that caveat, I feel confident that Marbella and the cities around it are just getting started in a historic and overall positive transformation.

Leave a Comment

Your email address will not be published. Required fields are marked *