Why too little is being built on the Costa del Sol, and what it means for buyers

When house prices on the Costa del Sol are discussed, the conversation is almost always about demand. Foreigners buying, northern Europeans who want to spend the winter in the sun, remote workers who have discovered they can do their job just as well from a terrace in Estepona. All of that is true. But it only explains half the picture. The other half, and in our view the most underrated, is the supply side: how many homes actually come onto the market, and why that number has been too low for many years.

The figures have in fact been moving in the right direction. The Málaga College of Architects (COA Málaga) approved projects (a visado, the professional sign-off on a building project) for 3,195 new homes in the province in the first quarter of 2026, 37 per cent more than in the same quarter a year earlier. The second quarter was quieter, with 2,363 homes, but the first half of 2026 as a whole was still about 15 per cent up on the first half of 2025. For the full year 2025, the college approved projects for 9,475 homes, around 6 per cent more than in 2024. That is a clear rise. The problem is the starting point: the Bank of Spain estimates that the gap between new homes completed and new households formed in Spain reached around 750,000 homes between 2021 and 2025. On the Costa del Sol, population growth, people moving in and international demand come on top of a market that was already tight. More approvals are good news, but they will not close the gap any time soon.

The reasons things move slowly are fairly down to earth. Zoned building land in attractive coastal areas is a limited resource, and rezoning new land is a municipal planning process under Andalucía’s land-use law (LISTA) that takes years, not months. Processing times for building licences are long in many municipalities. The Bank of Spain points to land and planning, and the availability of skilled labour, as the main constraints on new supply, and construction costs have risen sharply in recent years. Add to that the fact that an approved project is not a finished home: in our experience it typically takes two to three years from approval to handing over the keys. The rise in approvals we are seeing now will therefore reach the market some way into the future.

The effect on prices is what you would expect. According to Spain’s housing ministry, the average appraised value of homes in Málaga province rose 13.8 per cent from the second quarter of 2025 to the second quarter of 2026. This is not a bubble driven by speculation and cheap credit, as was seen before 2008. It is a rather dull but persistent imbalance between how many people want to buy and how many homes exist. The difference is worth noting, because the two situations behave differently when the market turns.

For you as a buyer, this has some practical consequences. New developments in good locations often sell out early, and prices tend to rise from one phase to the next as a project progresses. Getting in early has real value, provided the developer and the bank guarantee are in order. In the resale market, it means good properties do not stay on the market for long, and taking three months to think it over often means the home is gone. At the same time, you should take extra care with anything that has been for sale for a long time: there is usually a reason.

Our advice is not to rush, but to be prepared. Have your NIE number (foreigner’s identification number), a Spanish bank account and an independent lawyer in place before you find the property, not afterwards, and have a clear idea of budget, area and how you will use the home. Then you can act quickly when the right one comes along, instead of spending weeks on paperwork while someone else signs. Our article on whether it is too late to buy looks at timing in more detail. We follow both markets closely and are happy to help you judge what is realistic in your segment. Get in touch with Solkystmegleren for a no-obligation chat.

The figures in this article come from publicly available statistics and analysis from 2025 and 2026, and give a snapshot. Price trends vary a great deal between municipalities and types of property, and past performance is no guarantee of future returns.