Overview of residential new developments in Malaga – Guide to Limonar, Malagas most exclusive area.

Malaga has undergone and continues to undergo a spectacular cultural and infrastructural transformation and is now called the “gateway to the Mediterranean”. Barcelona has long been the first choice of international investors, but this has been postponed in the face of political chaos in Catalonia. Most people now turn to Malaga, where prices still have not risen as quickly as in other popular metropolitan areas in Spain, and only last year the city saw strong economic growth of 4.4%. This in combination of several major public and cultural initiatives in recent years, such as giving life to new pedestrian streets by banning car traffic, building a modern port, significantly improving communications, widening avenues and launching targeted investments in world-class gastronomy, culture and art.

Despite this rapid development, prices in Malaga are still about 30% lower than they were about 10 years ago. However, prices are rising rapidly and according to Spanish economic institutes, it is expected that prices in the Spanish housing market will rise the fastest in Malaga, from 2020 onwards

Malaga is doing everything right  with the expansion of the metro and the investment to become a cultural capital of the Mediterranean. For example, Antonio Banderas has recently opened a new notable theater in the city’s trendy SOHO district. In addition, from 2020, Malaga, together with Gothenburg, was named the capital of Smart Tourism in the EU. The primary focus is clearly on sustainable tourism. 

Developments in innovative green technology are strong in Malaga. Among other things, the city recently became an experimental “lab” for new, fully electric buses with a groundbreaking technology that means that the buses are loaded during the journey, and this technology is expected to be implemented around the world within a few years. In addition, the city is becoming a European hub for tech companies through Andalusia Technology Park, which already houses over 600 tech companies, such as Google and Oracle

Most Spanish construction companies and developers have begun to concentrate their efforts on Malaga City. One of the larger ones that has recently made this shift is Nuovit Group, which together with our mother company spanskafastigheter.se is launching a venture into the international market with a proven Spanish working model, which cuts off the promoter (in cases where this is possible, such as with the project ” Hexagon ”in the Limonar area found below) and cut prices without compromising quality or safety for the client. The big challenge, and the key to success in a “boom-market” like Malaga, is to find plots in attractive locations at prices below market value – and at this point Nuovit is the market leader

In this article we will go through:

  • Rental potential and expected value increase for housing in, among others, Limonar, Malaga
  • Important information about new rental laws in the province of Malaga and how we will solve this for our investors
  • Short guide to Malaga’s most exclusive area Limonar / Malagueta
  • Presentation of 3 new production projects in Limonar. Ca. 25% lower prices than neighboring projects.
  • Statistics and information on why so many investors are flocking to Malaga
  • Information about different types of amusement parks and other tourist attractions in the Malaga area

Long-term value growth and rental income

The national statistical authority recently published figures that shed light on the rental market in Spain. Rents have risen by 50% since 2013. The largest price increases have been in Palma, Barcelona and Malaga. In the Costa del Sol, short-term rentals against tourists have also increased significantly, and still do not seem to have reached their peak. In the first 7 months of this year, tourism in Malaga increased by 5.9% compared to the previous year. Even in these statistics, they go hand in hand, Malaga is at the top along with Barcelona and Palma. In the latter two areas, however, restrictions on renting out to tourists and sharp price increases have significantly dampened the willingness to invest.

Later in this article we will present some new developments, but mainly one, Hexagon, which benefits from lower prices per square meter than its competitors, as well as an elevated position with sea views for all apartments. The rental potential in this exclusive area, Limonar, is huge. According to statistics from Spainhouses.net, the average cost of a rental is 1800 € per month in Limonar (note that these statistics also include smaller and old apartments, without a view). This can be compared to lucrative Nerja, which attracts many  investors when the occupancy rate is higher there than, for example, in the Marbella area. Despite this, the average cost per month for rent is “only” 833 € in Nerja according to Spainhouses.net. NOTE! The figures are based on long-term rentals. Vacation rentals have significantly higher numbers.

Which areas are have most  demand in Malaga then? The historic neighborhoods, city center, and Malagueta / Limonar. We do not have any new apartments for rent in Limonar, but to bring in newly produced apartments in this exclusive part of the city is a bit like getting hold of the holy grail for rental companies. Many investors also feel great security in the fact that there is a strong demand for long-term rental from newly-relocated companies, lawyers, doctors, etc. These are also prepared to pay extra for the situation as well as newly produced.

According to the construction consultant’s analysis, the value increase in Limonar is expected to be approx. 7-8% per year over the next few years. Also note that off-plan projects, in growth areas (which, for example, was the case in Nerja on projects sold in 2016-2018), tend to increase in value by 25-30% during the construction process until moving in. In addition, Hexagon is about 20-25% cheaper than the corresponding apartments under construction / sales in the area.

Important new rental laws

Renting out your home to tourists per week or from month to month is a fast growing business in Malaga. To regulate this market, Andalucia has chosen a different route compared to, for example, Barcelona and Palma or the Canary Islands where the restrictions are very strict and apply in principle to all housing regardless of what the residents in different areas themselves think, a new law came into force in March 2019.

The new law makes it easier for community associations to decide for themselves the restrictions on the owners’ right to rent out their homes. The restriction only applies to rentals that are shorter  than 2 months. The problem, however, is that owners, as a rule, earn significantly more money from renting out shorter periods. Under the new law, housing associations throughout the province of Malaga can prohibit or restrict leasing for tourist purposes by raising it for voting at an association meeting. It is enough for three-fifths of the owners to vote for a ban for that to apply. This is therefore not a problem in places such as Nerja where the majority of the owners are foreigners who are happy to rent out their homes when they are not there to finance loan and costs.

About Limonar and Malagueta
El Limonar is the most exclusive area in Malaga with its beautiful mansions, large trees, green lushness and narrow streets. The area’s modern history began in the late 1800s when Malaga was one of Spain’s leading cities, with a commercial capacity only surpassed by Catalan Barcelona. In the late 1800s and early 1900s, new European magnates also began to discover that it is very nice and healing to relax by the sea. El Limonar quickly became popular for the newly rich because of the clean air and perfect location on the Mediterranean beaches. Between 1885 and 1900, European business magnates built numerous grand mansions and hotels. Several of these still remain today, mainly around the main street Paseo del Limonar.

1865 -Port and cathedral of Malaga

History repeats itself.

Malaga is once again entering a period of greatness and it is still El Limonar, as well as parts of the historic neighborhoods and areas around SOHO, that attract the strongest capital. The area is secluded and close to La Caleta beach and only 25 

minutes walk from the center. The area is very demanded by families and couples who want to be close to both the city pulse and the beach, but still be able to enjoy the tranquility of beautiful  neighborhoods, conveniently away from the highway’s alarm.

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