Spain’s coastal housing market is heating up once again, and this time it’s foreign demand driving the surge. Property prices in Andalucía and Valencia are rising faster than even Madrid, setting new records and redefining regional markets.

Prices Surge Beyond Expectations

According to new data, second-hand home prices have jumped by 20.6% in Andalucía and 17.1% in Valencia over the past year, outpacing Madrid’s 15–21% growth. An 80 m² flat now averages around €217,000 in Andalucía and €189,000 in Valencia. Although still cheaper than the Spanish capital, prices are climbing rapidly.

Foreign Demand Dominates

In coastal hotspots such as Alicante and Malaga, foreign buyers now account for between 40% and 50% of all purchases. Many are digital nomads, retirees, or lifestyle investors drawn by Spain’s year-round sunshine and lower cost of living.

Local Impact

While the boom is generating strong returns for investors, it is also widening the affordability gap for locals. New-build prices on the Costa del Sol now exceed €5,000 per square metre, well beyond what average local incomes can support.

What’s Next

Experts expect growth to moderate but remain positive through 2026, particularly in high-demand coastal cities. However, potential policy changes targeting non-EU buyers could reshape the market in the longer term.

Takeaway

Andalucía and Valencia are Spain’s new real estate frontiers, lifestyle destinations that have become investment magnets. For buyers and investors, they offer strong momentum and rental potential, but careful due diligence is essential as foreign interest drives valuations to historic highs.