Costa del Sol: from holiday charm to economic excellence
Spain's economic revival, buoyed by solid tourism appeal, foreign demand and enhanced infrastructure, positions Costa del Sol as a premier economic hub
Our Costa del Sol region, a sparkling jewel on the southern coast of Spain, has remarkably transformed over the last decade, reflecting a robust macroeconomic upswing and an upsurge in investment prospects. This Mediterranean coastline, famous for its pristine beaches and splendid resorts, is now not just a holiday destination but a hotbed for dynamic economic growth and sustainable lucrative property investments.
Spain’s resilience in bouncing back post-financial crisis laid a solid foundation for the sustainable growth which the nation has been experiencing. The steady accretion of foreign direct investment (FDI) into the country has buttressed this growth, leading to a buoyant property market, particularly in the Costa del Sol. The official data illustrates an interesting tide where both, foreigners and nationals, are increasingly placing their stake in the region’s real estate.
Several factors elucidate why the Costa del Sol is attracting a throng of investors.
Firstly, the Spanish government implemented an investor-friendly legal framework from 2013, which had a strong impact on all sectors, attracting FDI in all segments, economic, financial, manufacturing, real estate and technological.
As a result, the stock of FDI (Foreign Direct Investments) in Spain accounted for 56.3% of the GDP in 2022, surpassing the global average (44%), the OECD average (51%), and other major countries like France, Germany, and Italy. Over the past decade, the FDI share in the Spanish economy has increased by 9.2 percentage points (ICEX, the Spanish Institute for Foreign Trade).
Among those legal initiative, it is certainly to mention the offering of golden visas to non-EU nationals who purchase properties above a certain value (€500,000). Although this might change in the near future, it has paved the way for a surge in investments from non-EU citizens seeking both property assets and a gateway to Europe up until now. However, it is worth mentioning that according to media, about 10,000 applications have been given since the scheme has started, with about only 451 provided in 2022. Surely a statistical negligible number if compared with the overall number of properties bought by non-resident in Spain in 2022, which is 72.987 according to data from the Registers office (Consejo General de Notariado).
Secondly, the region has witnessed substantial improvements in infrastructure, with better connectivity to other parts of Europe attracting multinational corporations, tourism and professionals alike—adding a dynamic mix to the local economy. Larger numbers of expatriates residing in the region underscore the liveability and the attractive lifestyle that the Costa del Sol offers, which in turn stimulates the housing market. Consequently, this influx of residents serves as a catalyst for growth in the housing market.
Over the past decade, the province of Malaga has maintained a strong political and local support reflecting its commitment to economic expansion. The Costa del Sol has attracted millions of tourists annually, as a catalyst for local economic growth. This progress is clearly illustrated through numerical data. Notably, Malaga has experienced remarkable growth in both air traffic and its share of the national tourism market. In terms of air travel, Malaga’s airport has consistently increased its total number of passengers over the last ten years, outpacing other major destinations such as Barcelona or Palma de Mallorca.
Following the pandemic, Malaga's airtraffic experienced a substantial surge, witnessing a remarkable 13% increase from 2019. In contrast, Barcelona suffered a 5% decline, while Palma de Mallorca saw amodest 5% growth during the same period. Furthermore, when examining passenger data since 2012, Malaga's airport has achieved an astonishing 78% growth rate, underscoring its emergence as a prominent hub in Spain and Europe.
As a result, investments in advanced infrastructure, technology and international marketing have brought a period of strong economic growth based on advances in tourism and services, outpacing other popular Spanish destinations in magnitude and popularity. This strong trend can be seen by the steady increase in numbers of workers affiliated to the Spanish social security system in Malaga province in the last 12 years.
Investment growth in the area has resulted in a profitable real estate market. Yet, its implications extend beyond economic gains. These investments have spurred local job creation, diversified the economy, and facilitated regional development.
Ultimately, the Costa del Sol’s growth trajectory is a textbook example of how a regional economy has been able to reinvent itself and climb the rungs of investment attractiveness. With an ongoing commitment to embracing sustainable practices and maintaining an inclusive growth pattern, the region is set to remain a key player in Spain's economic narrative.
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