Is it the right time to buy a home on the Costa del Sol?
Deciding when is the right time to buy a home is one of the most important financial decisions anyone can make.
The current Costa del Sol market
Currently, in the Malaga coastal strip, known as the Costa del Sol, we are at a critical point where housing prices are constantly increasing, while mortgages have experienced some stability, thanks to their gradual interest rate reductions, with a Euribor below 2.5%. So, what’s better: acquiring a property now or waiting for mortgages to fall even further?
Why buying now might be the best decision?
Today, with a Euribor lower than in previous years, buying a home on the Costa del Sol could be the best decision you can make. Although the market is offering low stock of properties, the truth is that there are fewer buyers now than in the near future, when credit might be cheaper if Euribor continues to fall.
The equation indicates that if credit is cheaper, property stock is small, and there are more buyers, property prices will rise even further.
By acquiring a home today, you ensure you pay a lower price for the property. This is fundamental because, although mortgage interest rates may vary in the future, both up and down, there is always the option to refinance if you are not satisfied with what you are paying. What cannot be changed, however, is the price you pay for the home. If you wait and prices rise, you will end up paying more for the same property, and that cost will be permanent.
Why will prices on the Costa del Sol continue to rise?
1. Scarcity of urban land
The lack of urban land for new construction is a fact that directly affects the available supply. This is the main factor affecting housing prices, because it does not depend on the labor market or the cost of materials. If there is no large supply of land to build homes, their price will be increasingly higher as demand for properties in the area increases. As you can imagine, the Costa del Sol is one of the most sought-after places in Europe, and it is logical that the demand for properties to live and vacation here will continue.
2. New builds aimed at foreign buyers
New builds being constructed are mainly aimed at foreign buyers, who usually have greater purchasing power and are willing to pay more for the privilege of living on the Costa del Sol. As long as this trend continues, constructors will not build homes for lower-income segments. This will cause second-hand homes to increase in price, becoming more attractive to those of us who live all year round on the Costa del Sol.
3. Lack of second-hand properties
There is an evident lack of second-hand properties on the market. Many residents are not selling because they cannot afford current prices to move to newer or larger homes.
Furthermore, compared to other places, such as Madrid, Barcelona, or the Basque Country, the Costa del Sol still has lower prices, which indicates that there is room for them to continue rising if demand remains higher than supply.
The new normal of the real estate market on the Costa del Sol
Those who are looking to buy a home on the Costa del Sol, whether as a first home or as an investment, have already noticed that prices have risen considerably in recent years. In many cases, they have even doubled and more. This is the new normal of the real estate market on the Costa del Sol, and those who will benefit most will be those who accept this reality and act now.
Professional Advice
If you are thinking of acquiring a property on the Costa del Sol, it is highly recommended that you buy what is within your reach, even if it is not exactly what you need or want at this moment. The priority should be to put your savings into bricks before properties continue to rise and you lose purchasing power.
In this way, you will capitalize your investment and have the opportunity to seek additional profitability by renting the property, with which you can rent what you need, until you can buy a home with the desired characteristics.
Act quickly: time is key. There is no time to lose. In a constantly rising market like the Costa del Sol, acting fast can be the difference between seizing a golden opportunity or losing purchasing power with your savings while prices continue to climb.
Conclusion: Buy today and secure your future on the Costa del Sol!
