Property Market Report
First Half 2025: Market Evolution and Investment Opportunities
By Brian Stevendale of Sandtons Luxury Property 2025
EXECUTIVE SUMMARY
A Market That Continues to Surprise
After three decades in the Costa del Sol property market, I can confidently say that the first half of 2025 has been extraordinary. Despite opening the year with significant policy uncertainty and global economic headwinds, we've witnessed remarkable resilience, innovation, and growth across all market segments.
The Costa del Sol has not merely weathered the storm—it has emerged stronger, more sophisticated, and more internationally diverse than ever before. This report examines the key trends, challenges, and opportunities that are shaping our market as we head into the second half of 2025.
CHAPTER 1
The Policy Headlines That Defined Early 2025
The 100% Tax Proposal: Much Ado About Nothing
January’s announcement of Pedro Sánchez’s proposed 100% property tax for nonEU buyers created considerable anxiety among international investors. The proposal, part of the broader Plan de Vivienda, threatened to fundamentally alter the investment landscape that has driven much of our market’s success.
However, as we predicted in our client communications, this proved to be largely political posturing. The proposal quickly disappeared from active consideration, resurfacing only briefly in May when the PSOE tabled the bill in Congress. Throughout this period, we maintained our guidance that implementation was highly unlikely—a position that proved correct.
Key Learning: In our business, separating political noise from actionable policy is crucial. Market fundamentals matter more than headlines.
Golden Visa Closure: End of an Era
February brought the official closure of Spain’s Golden Visa program, ending the €500,000 property investment route to Spanish residency. Interestingly, this sparked a last-minute rush from buyers who had previously shown minimal interest in the scheme.
The actual market impact has been limited. Most international buyers are motivated by lifestyle aspirations rather than residency benefits, and those seeking residency have successfully explored alternative legal routes
The American Revolution: 2025’s Biggest Story
The most significant trend of 2025 has been the dramatic surge in American buyers. North American clients now represent approximately 50% of our business—a figure that seemed impossible only a year ago.
Current International Buyer Breakdown
USA
40% and growing rapidly
UK
25%
Brexit-resilient demand
OTHER
NE 12% consistently strong 23%
Germany, Scandinavia, Canada, and the Middle East
This American influx reflects multiple factors:
• Geopolitical considerations driving relocation decisions
• Superior quality of life and value propositions
• Remote work flexibility enabling lifestyle changes
• Spain’s appeal over traditional closer-to-home destinatiwons
The Demographic Revolution
Perhaps more significant than nationality trends is the age demographic shift we’re witnessing. The traditional 60+ holiday home buyer profile is expanding dramatically:
• Families with school-age children making permanent relocations
• Digital nomads and tech professionals choosing Spain as their base
• Young entrepreneurs seeking lifestyle / business balance
• Early retirees accelerating life change decisions
This younger buyer profile drives demand for international schools, modern amenities, superior connectivity, and family-oriented communities. We’re seeing families interrupt traditional life patterns, relocating children during primary school years to build new lives in Spain.
CHAPTER 2
Market Performance: Resilience Across All Segments
According to the latest official data, the Golden Triangle (Marbella, Estepona, Benahavís) recorded strong performance in H1 2025:
• Total transactions: Up 6.98% year-on-year
• Resale properties: Continue to dominate at 91% of all sales
• New construction: Growing quarter-on-quarter with premium pricing
• Foreign buyer participation: Remains at approximately 33% in Málaga province
Benahavis
continues to command Andalusia’s highest average at €4,771/m², reflecting its exclusive golf resort positioning and limited inventory.
Marbella
maintains its premium status at €4,461/m² average, with Golden Mile and Puerto Banús properties achieving €6,000-8,000/m²+ for prime positioning.
Estepona
shows strong fundamentals at €3,906/m², driven by infrastructure improvements and new development pipeline.
Fuengirola
presents compelling value at €3,195/m², representing the strongest recovery trajectory since 2008 across all property segments.
Casares
emerges as the growth leader with 31.8% annual appreciation to €2,836/m², indicating early-stage premium market development.
Investment Intelligence
Market Dynamics
Price variance within individual developments can exceed 40% based on floor level, orientation, and view premiums. This creates both risk and opportunity depending on acquisition strategy and market timing
Growth Trajectory Analysis
The 31.8% Casares appreciation signals spillover demand from saturated premium markets, while Fuengirola’s sustained momentum indicates mainstream market strength beyond luxury segments.
Strategic Market Positioning
Current pricing differentials between municipalities create arbitrage opportunities for investors with 3-5 year investment horizons, particularly in transitional locations showing infrastructure investment.
Professional Market Assessment
Given the complexity of micro-location valuations and the significant impact of property-specific factors on pricing, professional market guidance becomes essential for optimal transaction outcomes.
Market conditions continue to favour informed participants who understand the nuanced factors driving value creation across the Costa del Sol
Investment Performance Indicators
Luxury segment resilience
Properties above €1M showing growing demand
Capital appreciation
Consistent growth to 15+% annually in prime locations
Rental yields
Averaging 6-11% for quality properties with proper licensing
Construction cost inflation
Stabilising at €2,500-3,500/m² for quality builds
Average price changes all property types for the last 12 months
Estepona
Estepona
Estepona
Average sales prices on MLS for the last 12 months
Hot Markets and Emerging Opportunities
Estepona West
This area has become a developer favourite with multiple high-quality projects launching simultaneously. Bayside, Isea, OneEstepona have rapidly sold through and the latest additions, Sunway, Celestia, Vivace Villas (sold out on the first phase in days), exemplifying the exceptional demand in this location. The West of Estepona is continuing its transformation from quiet coastal town to major development hub, supported by infrastructure improvements and expanded connectivity.
Casares
While the coastline is one of the smallest in distance, that’s not stopping the boom in luxurious new developments in the exclusive Finca Cortesin and in luxury living developments along the coast road. This new cluster of home offerings is positively impacting the resale market, where homes are up on average almost a third on the year.
Marbella Golden Mile
Remains the undisputed premium destination with properties commanding €10,000-15,000/m² in prime beachfront locations.
Nueva Andalucía
Strong consistent demand across all property types, from golf villas to modern apartments.
La Zagaleta (Benahavís)
Europe’s most exclusive residential community maintaining its prestigious appeal. Its neighbouring areas of La Quinta and El Madroñal have seen transactions in bespoke and boutique luxurious villas.
CHAPTER 3
The Development Revolution: Resort-Style Living as Standard
The amenity arms race among developers has reached unprecedented levels in 2025. What was once considered luxury—pools, gardens, basic gym facilities—is now merely the entry point.
Modern Buyer Expectations:
• Professional-grade fitness centres (not basic gyms)
• Indoor pools alongside outdoor options
• Dedicated co-working spaces with high-speed connectivity
• - Comprehensive spa and wellness facilities
• Professional concierge services
• Multiple entertainment and social areas
• Smart home technology integration
• Sustainability certifications (LEED, BREEAM)
Developers are literally sacrificing sellable square footage to accommodate these amenities, understanding that without them, projects cannot compete in today’s sophisticated market.
Standout Developments of H1 2025
Epic Marbella by Fendi Casa
56 exclusive apartments, Europe’s first Fendi Casa development
Karl Lagerfeld Villas
Five luxury homes on Marbella’s Golden Mile
Angsana Real de La Quinta
Banyan Tree Group’s first Spanish project
The Gallery by Minotti
33 luxury villas with resort amenities
St. Regis The Residences
Spain’s first St. Regis-branded residences
The Branded Residences Phenomenon
The arrival of prestigious brands represents more than luxury marketing—it signifies market maturation and sophistication. These projects establish new benchmarks in:
• Architectural innovation and design excellence
• Service level expectations and lifestyle management
• Community amenities and resident experiences
• Investment potential and long-term value appreciation
Current and upcoming branded projects include collaborations with:
• Fashion Houses: Versace, Dolce & Gabbana, Missoni, Elie
Saab
• Luxury Hotels: Four Seasons, W Hotels, St. Regis
• Automotive Brands: Lamborghini (Tierra Viva project)
• Design Brands: Minotti, Karl Lagerfeld
According to Knight Frank’s Branded Residences Report, buyers typically pay 25-35% premiums for branded properties, driven by services, amenities, investment potential, and brand identity.
Sustainability: The New Luxury Standard
Environmental consciousness has evolved from nice-to-have to essential requirement. Today’s luxury buyers expect:
• Energy efficiency certifications (LEED, BREEAM, Passivhaus)
• Solar integration and renewable energy systems
• Smart home technology for optimal resource management
• Sustainable materials and construction methods
• Water conservation systems and native landscaping
Properties with genuine sustainability credentials command premium pricing and achieve faster sales. Industry experts predict clean energy properties could appreciate 10-20% more over the next decade.
CHAPTER 4
Market Analysis
Understanding Buyer Behaviour
Resale Market Performance:
• Under €300,000: Moving quickly with strong first-time buyer demand
• €300,000-600,000: High activity from lifestyle buyers and investors
• €600,000-1,200,000: The most active luxury segment
• €1-4 million: Steady performance with sophisticated international buyers
• €4-10 million: Selective market requiring premium locations/features
• €10+ million: Limited but consistent ultra-high-net-worth demand
New Construction Preferences:
• Apartments in resort complexes: Highest demand category
• Modern villas with privacy: Strong consistent interest
• Townhouses in gated communities: Growing family-oriented demand
• Branded residences: Premium segment with waiting lists
Investment Opportunities and Strategies
Immediate Opportunity Areas:
• East Estepona:
Exceptional value with growth potential
• Casares:
A new frontier in developments with strong fundamentals in capital growth
• New Golden Mile: International buyers driving demand & growth
• Estepona:
Public debt wiped out, with surplus lowering property taxes by 20% and over €1billion in private investment
Established Premium Markets:
• Marbella Golden Mile: Blue-chip investment location
• Puerto Banús area: Consistent luxury demand
• Nueva Andalucía: Balanced lifestyle and investment appeal
Rental Investment Strategy:
• Focus on communities with confirmed rental licensing
• Target resort-style developments with management services
• Consider build-to-rent concepts emerging in the market
Capital Appreciation Strategy:
• Prime locations within 5km of coast
• Properties with genuine luxury amenities
• Developments with sustainability credential
Lifestyle Investment Balance:
• Quality of life considerations increasingly important
• International school proximity for family buyers
• Golf course and marina access for leisure-focused purchasers
Technology and Innovation Trends
Modern developments increasingly feature:
• Voice-controlled systems for lighting, climate, and entertainment
• Automated security systems with mobile app integration
• Energy management systems optimising consumption and costs
• Remote property monitoring for absent owners
Construction Innovation
• Prefabricated structures reducing build times and costs
• Sustainable building techniques meeting environmental standards
• Advanced materials improving energy efficiency and durability
Economic Outlook and Market Drivers
Regional Economic Strength
• Málaga Province: Leading Spanish growth at 12.75% price increases
• Tourism Performance: Record-breaking visitor numbers sustaining demand
• Employment Growth: Particularly strong in technology and service sectors
• Infrastructure Investment: Continued expansion of transportation and utilities
International Connectivity
• Málaga Airport: 158 destinations across 35 countries
• Major Expansion: Airport to gain €1.5billion investment to meet demand
• Direct Flight Expansion: Year-round Málaga-USA city routes planned
• High-Speed Rail: Improved connectivity to Madrid and European networks
Market Resilience Factors
• Safe Haven Appeal: Political stability attracting international investment
• Climate Advantage: 320+ sunny days annually
• Healthcare Excellence: World-class medical facilities and services
• Educational Infrastructure: Growing international school network
Challenges and Considerations
Market Complexity
• Inventory Navigation: Requires sophisticated professional guidance
• Regulatory Environment: Ongoing evolution demands constant monitoring
• Quality Variance: Wide range between developments requiring expert evaluation
Supply Constraints
• Land Availability: Limited in prime coastal locations
• Construction Delays: Material costs and skilled labour shortages
• Licensing Processes: Varying approval times across municipalities
Investment Risks
• Rental Regulation Uncertainty: Ongoing policy evolution
• Market Segmentation: Clear performance differences across price ranges
• Construction Quality: Varying standards requiring due diligence
CHAPTER 5
Looking Ahead: Predictions for H2 2025 and Beyond
Market Trend Predictions
Immediate Projections (H2 2025):
• American Buyer Growth: Trend will continue and likely accelerate
• Development Activity: No slowdown anticipated—premium projects launching
• Rental Licensing: Will become key factor in property selection, expected in future new builds to derisk
• Sustainability Requirements: Will become more stringent and valuable
Medium-Term Outlook (2026-2027):
• Build-to-Rent Concepts: Will emerge as developers respond to relocation demand
• Branded Residences: Expansion across all major developments
• Technology Integration: Smart home features will become standard
• International Schools: Expansion to meet family relocation demand
Long-Term Vision (2028-2030):
• Market Maturation: Continued evolution toward global luxury destination
• Infrastructure Completion: Major transport and utility projects finishing
• Sustainable Development: Environmental standards driving all new construction
• Demographic Shift: Younger, more diverse international community established
Strategic Recommendations
For Lifestyle Buyers:
1. Act with Professional Guidance: Market complexity requires expert navigation
2. Consider Emerging Areas: Exceptional value in developing prime locations
3. Prioritise Amenities: Resort-style features now essential for resale
4. Verify Rental Rights: Understand community regulations before purchase
For Investors:
1. Focus on Quality Developments: Premium amenities ensure stronger appreciation
2. Diversify by Location: Balance established and emerging areas
3. Understand Rental Regulations: Critical for investment returns
4. Consider Branded Options: Premium potential with professional management
For Developers:
1. Invest in Amenities: Resort-style facilities now market requirement
2. Embrace Sustainability: Environmental credentials increasingly valuable
3. Target International Markets: Diverse buyer base reduces risk
4. Consider Branding Partnerships: Premium positioning and faster sales
Conclusion: A Market in Full Evolution
The Costa del Sol property market in 2025 represents far more than traditional real estate activity—it’s witnessing a fundamental transformation in how international buyers view property investment and lifestyle choices.
The convergence of several powerful trends—American buyer influx, technological advancement, sustainability requirements, and demographic shifts—is creating opportunities that were unimaginable just a few years ago.
Key success factors moving forward:
Quality Over Quantity: The market increasingly rewards genuine luxury and innovation over basic accommodation.
Professional Guidance: Market complexity makes expert advice more valuable than ever.
Long-term Perspective: Sustainable, well-located properties with quality amenities will continue outperforming.
International Appeal: Developments targeting diverse buyer bases show strongest resilience.
As we enter the second half of 2025, all indicators point to continued strong performance. This is supported by:
• Consistent international buyer interest across multiple nationalities
• Ongoing premium development activity with innovative concepts
• The Costa del Sol’s growing reputation as Europe’s premier lifestyle destination
• Strong economic fundamentals and infrastructure investment
For those positioned correctly—whether seeking lifestyle enhancement or investment returns—the opportunities ahead are extraordinary. The market that started 2025 with uncertainty has proven, once again, why it remains Europe’s most compelling property destination.
The Costa del Sol continues to evolve, surprise, and deliver for those who understand its unique dynamics and long-term potential.
