Costa del Sol Property Prices Climb 7–10% in 2025, Luring International Investors

Record Growth in Costa del Sol's Real Estate Market in 2025

The Costa del Sol, a prime real estate destination in Spain, has experienced a remarkable surge in property prices, increasing by 7–10% year-on-year in 2025. This growth is primarily driven by the booming off-plan and luxury property segments. With property prices still 20–30% lower than comparable luxury markets in France and Italy, international investors are flocking to the region. According to Idealista, the average property price in Spain reached €2,517 per square meter in September 2025, indicating a 15.3% annual increase, further boosting investor confidence in the Costa del Sol's market.

Off-Plan and Luxury Developments Lead the Charge

The growth in property prices in the Costa del Sol is largely attributed to the rising demand for off-plan and luxury developments. As indicated by Sparkling Homes Marbella, the region is expected to see a cumulative price increase of nearly 9% through 2026. Key areas such as Marbella and Estepona are experiencing a persistent supply-demand imbalance, which is projected to result in a 600,000 unit deficit by 2025. This scarcity is a primary driver of the escalating prices, making these locations highly attractive for investment.

Comparative Affordability Boosts International Appeal

The Costa del Sol offers a distinct advantage with its comparative affordability against other luxury destinations. Properties in this region remain 20–30% more affordable than those in luxury hotspots like the French Riviera and Tuscany. This affordability, combined with the region's coastal charm and lifestyle offerings, is attracting a diverse range of international buyers, particularly from Europe. The ongoing interest from European investors is further enhanced by rising household incomes and favorable monetary policies, as noted in the CBRE Spain Real Estate Market Outlook 2025.

Strong Foreign Demand Fuels Market Dynamics

The Costa del Sol's real estate market dynamics are significantly influenced by foreign demand, particularly from British buyers. As reported by Livingstone Estates, Marbella's luxury property market has doubled in the past seven years, outperforming the national average. This trend is expected to continue, driven by strong foreign investment and the region's robust economic indicators, including a projected GDP growth of 2.6% in 2025.

Investment Opportunities Amidst a Global Slowdown

Despite a global slowdown, the Costa del Sol remains a resilient investment hotspot. The ongoing demand for luxury properties in Marbella, Estepona, and Benahavís highlights the region's potential for high-yield investments. According to Euro Weekly News, transaction volumes in the first half of 2025 have already surpassed 2024 figures. This growth underscores the area's appeal to foreign investors seeking stable returns amidst global economic uncertainties.

Transaction volumes in the first half of 2025 have already surpassed 2024 figures.

Future Implications for Investors

Looking ahead, the Costa del Sol's real estate market presents promising opportunities for investors. With the Spanish economy expected to grow and tourism continuing to drive demand, the region's property market is poised for sustained growth. RealEstateAbroad.com analysis suggests that investors should consider targeting high-demand areas like Marbella and Estepona to capitalize on the market's momentum. Additionally, the persistent housing supply deficit offers potential for development projects, providing lucrative opportunities for savvy investors.

• Focus on luxury and off-plan developments for high returns.
• Consider strategic investment in high-demand areas.
• Monitor ongoing economic indicators for market insights.