Costa del Sol Property Market Outlook: What To Expect by January 2027

The Costa del Sol property market is not slowing in the way many people expected. But it is changing.

After several years of unusually strong growth, we are entering a more selective phase. Buyers are taking more time, comparing properties more carefully and questioning asking prices. At the same time, good properties in the right locations remain scarce, international demand is still very strong and prices continue to rise.

For me, this is probably the most important point when looking towards the end of 2026:

fewer transactions do not automatically mean falling prices.

And that is exactly what we are seeing today.

Spain is still experiencing strong price growth

According to Spain’s National Statistics Institute, residential prices increased by 12.2% year-on-year in Q2 2026. Resale property prices rose even faster, by 12.9%, while new-build prices increased by 7.4%.

The latest valuation data shows some moderation, but not a reversal. Residential values were still 12.5% higher year-on-year in Q2, compared with 13.9% in Q1. CaixaBank Research describes this as a slowing of the rate of growth rather than a change in direction.

There is a simple structural reason for this.

Spain continues to create far more households than homes. CaixaBank notes that around 239,000 new households were created over the latest twelve-month period, while new housing permits reached only around 141,000 units. BBVA also expects construction activity to increase during 2026 and 2027, but still not sufficiently to close the gap.

That shortage matters enormously on the Costa del Sol.

The Costa del Sol is moving into a different phase

The best illustration comes from the Golden Triangle of Marbella, Estepona and Benahavís.

During the first six months of 2026, there were 3,422 residential transactions, compared with 4,313 during H1 2025 — a decline of 20.7%.

But the interesting part is what happened next.

Transaction activity increased by 9.7% from Q1 to Q2, while the average transaction price per square metre across the Golden Triangle was around €4,366/m², approximately 15.5% higher year-on-year.

So we currently have fewer transactions than during the exceptional 2024–2025 period, but buyers are still paying more for the properties that are actually selling.

That tells me this is becoming a more disciplined market, not a weak market.

Overpriced properties can sit unsold. Good properties priced correctly still move.

Marbella, Estepona, Benahavís, Mijas and Sotogrande are no longer moving at the same speed

The differences between locations are becoming increasingly clear.

Idealista’s August asking-price data puts Marbella at €5,956/m², up 4.0% over twelve months.

Estepona reached €4,961/m², an extraordinary 17.4% increase year-on-year.

Benahavís reached €5,553/m², up 7.1%.

Mijas stood at €3,711/m², 8.9% higher than a year earlier, while La Cala de Mijas reached €4,593/m², up 10.7%.

Sotogrande reached €3,984/m², up 11.6% year-on-year. Within Sotogrande, the difference between micro-locations is already significant: Sotogrande Costa stood at €4,344/m² and Puerto de Sotogrande–La Marina at €4,305/m² in August 2026.

For comparison, Málaga province as a whole averaged €4,293/m², 7.4% higher than August 2025.

These are asking prices rather than final transaction prices, so they should never be read as the exact value of an individual property. But they show very clearly where the pressure remains strongest.

I also would not simply extrapolate Estepona’s 17% annual rise into 2027. Growth at that speed is difficult to sustain indefinitely. What it does show is how quickly the gap between established Marbella and its neighbouring markets has been narrowing.

International demand remains one of the biggest differences between the Costa del Sol and most Spanish markets

The local market is no longer dependent primarily on Spanish buyers.

According to the latest Notary data analysed by DM Properties | Knight Frank, foreign buyers represented approximately 61% of residential purchases in Marbella, 68% in Estepona and 85% in Benahavís.

That is an important reason why the Costa del Sol does not necessarily react to interest rates or the Spanish economy in the same way as a normal domestic housing market.

The buyer base is increasingly international and diversified.

And access to the region continues to improve. Málaga-Costa del Sol Airport handled 19.3 million passengers during the first eight months of 2026. In August alone, passenger numbers rose 6.6% year-on-year and international traffic grew by almost 8%.

That may look like a tourism statistic, but for real estate it matters. Connectivity supports second-home ownership, relocation, remote working and international investment.

There is one important change to watch: financing

One part of the market has become slightly less comfortable.

The ECB increased its deposit rate by 25 basis points in September to 2.50%, after inflation pressures increased again.

At the same time, 12-month Euribor reached 2.954% in August, compared with 2.855% in July and 0.84 percentage points higher than one year earlier.

This is unlikely to stop international prime demand, but it matters more in the €300,000–€700,000 segment where buyers depend more heavily on mortgage financing.

It is one reason why I expect the market to become increasingly divided between properties buyers really want and properties that are simply offered at ambitious prices.

My outlook to January 2027

Looking at the current data, I do not expect a broad price correction on the Costa del Sol between now and the New Year.

My base case is a continuation of price growth, but at a slower and far less uniform pace.

For the next four months, this is what I would expect:

• Prime Marbella, Golden Mile, Nueva Andalucía and the best parts of Benahavís: prices should remain firm. For genuinely good properties, I would expect roughly 1–3% additional movement by January, rather than another dramatic jump.
• Estepona and the New Golden Mile: I expect continued demand and further price growth, although the recent 17% annual rate should moderate. A further 2–4% by early 2027 is realistic for strong locations and quality developments.
• Mijas Costa and La Cala: still have room to attract buyers who find Marbella and increasingly Estepona expensive. I expect around 1–4% movement, with large differences between individual developments.
• Sotogrande: I expect the prime end of the market to remain resilient, particularly Sotogrande Costa, La Marina and the best villa locations. After an 11.6% annual rise in asking prices, I would expect a more moderate 1–3% additional movement by January, with the strongest properties continuing to outperform the average.
• Overpriced resale stock: this is where I expect the biggest change. Not necessarily falling market values, but longer selling periods, more negotiation and price reductions where sellers are disconnected from recent comparable transactions.
• New developments: I see very little structural reason for developers to reduce headline prices aggressively. Land, construction and financing remain expensive, while good new-build supply is limited.

These are ranges rather than exact forecasts. Property does not move as one single market, especially on the Costa del Sol.

A renovated three-bedroom apartment walking distance from the beach in Marbella is a completely different market from a dated property twenty minutes inland. The postcode alone is no longer enough.

So, is it still a seller’s market?

Not quite in the way it was two years ago.

And I actually think that is healthy.

Buyers have regained some negotiating power. Sellers need to price realistically. Properties need to justify their price through location, views, quality, condition, outdoor space and amenities.

At the same time, the underlying reasons people are buying here have not disappeared.

The climate has not changed. International schools have not disappeared. Málaga Airport continues to grow. Marbella continues to attract international wealth. More people are choosing to divide their lives between countries. And new housing supply remains difficult and slow to produce.

This is why I see the end of 2026 as a period of normalisation rather than reversal.

The easy market, where almost anything could be listed at a higher price and eventually find a buyer, is disappearing.

The market for genuinely good property is not.

My view going into 2027

If I had to describe the Costa del Sol market entering 2027 in one sentence, it would be this:

Prices are likely to remain firm, but property selection and the price you pay will matter much more than they did during the last few years.

For buyers, that means there is little reason to panic or rush simply because someone says prices will rise.

But waiting for a major market-wide correction may also mean waiting for something that the current supply and demand figures simply do not support.

The opportunities will increasingly be found property by property, not by trying to time the entire Costa del Sol market.

Reelika Andresson
La Costa Hub

Data reviewed September 2026.