Where to Invest on the Costa del Sol Part I: Strong Growth
When we hear that “prices on the Costa del Sol have risen by over a dozen percent,” it’s easy to think of a single market. In reality, it’s a dozen different markets under one sun. According to the Tinsa IMIE index, square meter prices in Málaga province rose by 13.1 percent year-on-year in the first quarter of 2026. But this single figure conceals vast differences between cities, and even between neighboring urbanizations. And it is precisely in these differences that the potential for profit lies.
Below, we show where value is growing fastest, what real returns can be expected over five years, where to look for new investments for growth, and how to approach renovation gems.
Growth Map: Who's Leading
At the end of 2025 and beginning of 2026, the picture was quite clear. The strongest growth was not in the most expensive addresses, but in those just below them.
Benahavís closed the year at approximately 5,425 euros per square meter, with a dynamic growth of around 15 percent year-on-year. Mijas, a significantly more affordable entry point at around 3,569 euros, grew by approximately 14 percent. Estepona, at about 4,116 euros per square meter, added approximately 13 percent. Marbella, still the most expensive, grew more moderately, by 9 to 10 percent, as it starts from the highest base. More broadly, the entire Málaga province is recording its fifth consecutive year of growth above inflation, and the premium strip, comprising Marbella, Benahavís, and Estepona, is outperforming the average, growing by approximately 11 to 13 percent.
An important methodological caveat: figures for individual cities are most often asking prices at the municipal level, while Tinsa’s 13.1 percent refers to the entire province and valuation prices. These are two different measures and should not be confused. However, the direction is consistent.
Separately, it is worth observing emerging markets. La Cala de Mijas, Mijas Costa, Benalmádena, and Manilva are currently identified as areas with the greatest potential, benefiting from infrastructure investments and the spillover effect of demand from more expensive neighbors. A lower entry point there means greater room for growth.
Why There, Specifically
Behind the growth lies one mechanism: supply is insufficient in the locations buyers desire, especially near the sea. Local decisions also play a role. Estepona spent a decade organizing its urban planning, and the construction of the coastal promenade genuinely increases the value of projects along the New Golden Mile. Limited land availability in Marbella pushes developers to Mijas, Fuengirola, Benahavís, and primarily Estepona, where most new developments are currently being built. The effect is that previously more affordable areas are catching up the fastest.
What Real Returns Can Be Achieved in Five Years
Let’s calculate the value appreciation alone, excluding rent, using a simple example. Assume a purchase of 400,000 euros in one of the faster-growing micro-markets.
With a conservative assumption of 5 percent annually, the property is worth approximately 510,000 euros after five years, an increase of roughly 110,000. At a moderate 6 percent annually, it’s about 535,000, or plus 135,000. At a strong 8 percent annually, it’s about 588,000, nearly 188,000 in profit from value alone.
Two honest remarks. Firstly, these are illustrative scenarios, not a forecast or promise, and they calculate gross growth, before purchase costs (approximately 10 to 13 percent) and selling costs. Secondly, forecasts for the coming years suggest a calmer dynamic, around 5 to 9 percent annually, after two exceptionally strong years. This means the moderate scenario is more realistic here than a repeat of records.
Primary Market: Where to Look for Growth
If you are interested in new construction for value appreciation, four corridors stand out most today.
The New Golden Mile and Estepona represent the most active front for new developments on the coast. New construction in Estepona reached a record 7,000 euros per square meter at the end of 2025, and one project, Tyrian Residences, was recognized as the best residential investment in Spain at the European Property Awards 2025. Prices for new projects here are still lower than in comparable parts of Marbella, with much activity in the Las Mesas district and along the coastal promenade.
La Cala de Mijas and Mijas Costa are markets that have transformed from sleepy coastal towns into some of the most dynamic. The key here is the pre-sale mechanism: entering at an early stage allows one to benefit from price appreciation as subsequent phases are released at higher prices.
Fuengirola and the El Higuerón corridor offer a combination of value and accessibility: significantly better price per square meter than in Marbella and a train to the airport every few minutes. Manilva and Casares, as the western extension of Estepona, in turn offer similar quality at a lower price, with beachfront projects starting from around 400,000 euros.
Remember that for the primary market, 10 percent VAT and an AJD fee of approximately 1.2 percent are added, and payments are spread across construction stages. Always verify specific projects and prices
Renovation Gems: Where and How to Find Them
For experienced investors seeking higher returns: the most interesting profit often lies not in new construction, but in the difference between a neglected property and a refreshed one in the same urbanization. This is classic value add: you buy at a discount what needs work, and you close the gap to the price of a move-in ready apartment.
This math works best where there is a lot of older stock and strong demand for a ready product: in Fuengirola, Mijas Costa, and Benalmádena for apartments, and in Nueva Andalucía, Marbella East, and El Paraíso for villas to modernize. It is precisely in Fuengirola and Mijas that many older buildings await renovation, and a smart refresh—painting, kitchen and bathroom upgrades, and stylish furnishing—can significantly increase the price. Marbella East and western Estepona currently offer the greatest price-to-value potential.
How to recognize a gem? Look for a price significantly below refreshed comparable offers in the same urbanization, a long time on the market, descriptions like “do remontu” or “para reformar,” a low energy class (which genuinely lowers the price today), and motivated sellers, for example, due to inheritance. Always calculate renovation costs with a buffer, check if the work requires permits, consider community regulations, and the 7 percent ITP tax in Andalusia for the secondary market. Without this, it’s easy to overpay for a “bargain.”
Here’s an honest caveat: on the Costa del Sol, the best deals rarely hit the open market. They are usually passed on the same way they have been for many years – over wine, coffee, champagne, and sometimes also chocolate and churros.
What This Means
The Costa del Sol is not a single market, but a mosaic of markets with very different paces. The fastest growth today is seen not in the most expensive addresses, but just below them: in Estepona, Benahavís, Mijas, and in the eastern emerging markets. The true advantage comes from choosing the right micro-market and the right product, whether new or for renovation.
And if you had to bet on one scenario today, what would be more important to you: the steady growth of a ready-to-move-in apartment in a strong location, or the greater potential profit from a gem that requires work?
Sources: Tinsa IMIE and Colegio de Registradores (prices and transactions, Málaga province), idealista, Pure Living Properties, Prestige Expo, proprietary data and market reports from agencies for 2025 and 2026. Data is for illustrative purposes; prices and dynamics are verified individually before transaction. This text does not constitute investment, legal, or tax advice.