Conflicting headlines paint very different pictures of the Costa del Sol property market. We take a measured look at recent sales figures, property prices, changing international demand and what it all means for buyers and sellers.
Slow Ahead, Captain!
Everywhere you look, there seems to be another headline about the Costa del Sol property market.
One day we're told that property prices are continuing to rise and demand is stronger than ever. The next day we're reading that foreign buyers are disappearing and the market is heading for trouble.
So what is actually happening?
The truth is that property markets are rarely as dramatic as the headlines suggest. Social media and the press tend to concentrate on extremes. A booming property market makes a good headline, and so does a collapsing one. A market that is simply adjusting to changing circumstances is rather less exciting.
We've been selling property on the Costa del Sol for many years, and we've seen plenty of changes during that time. We don't pretend to know exactly what will happen next, but when we're talking to clients about buying or selling, we find it helpful to look beyond the headlines and put things into perspective.
What do the latest figures actually tell us?
A recent article in Euro Weekly News reported that foreign property purchases in Spain fell by 13% during the first six months of 2026 compared with the same period in 2025. The figures came from Spain's General Council of Notaries, so the reduction in transactions is real.
But what does a 13% reduction actually mean? For a start, it means that transaction volumes were still 87% of the previous year's level. That's a slowdown, but it certainly doesn't mean that the property market has stopped functioning.
We also need to look at what happened in the preceding years. If we're comparing today's figures with a period of unusually strong activity, a reduction may look more dramatic than it really is. In fact, foreign purchases increased by 2.3% in the first half of 2024 and a further 2% in the first half of 2025, before the latest decline.
So we shouldn't ignore the reduction, but neither should we draw conclusions from one percentage without considering the wider picture. And we must remember that these are figures for Spain as a whole. The Costa del Sol has its own characteristics, particularly because of the importance of international buyers and the different reasons people purchase homes here.
Property prices and the cruise liner
One way we sometimes think about the property market is to compare it with a large cruise liner. You can't bring a cruise liner to an emergency stop.
Initially, there may be signs that conditions ahead are changing, but nobody wants to reduce speed unnecessarily. Perhaps things will carry on as before.
Then it becomes clearer that circumstances really have changed, and the decision is made to slow down.
But even after the engines are reduced, the ship continues travelling forward. It takes time for the change in speed to have an effect.
We find this a helpful way of explaining how property markets can work.
After a period of rising prices, sellers become accustomed to the idea that their properties are worth more each year. They look at what neighbouring properties are advertised for and sometimes assume that theirs should be worth another 5% or 10% on top.
Asking prices are not necessarily selling prices. When buyers become more cautious, the first sign may not be falling prices. It may simply be fewer viewings, fewer offers or properties taking longer to sell. And even when those signs become apparent, it can take time for sellers to adjust their expectations.
That doesn't mean all properties are overpriced, or that prices across the market need to fall. But properties that have moved beyond realistic market values may need to be adjusted, and the pace of price increases may need to slow down.
The difficulty is that by the time everyone recognises that circumstances have changed, the market may already have moved further than they realise.
Buyers and sellers often see things differently
There are still buyers looking for homes on the Costa del Sol, and a realistically priced property that meets their requirements is naturally more likely to attract serious consideration than one that is overpriced.
But buyers are perhaps more cautious than they were. If someone finds a property they really like but believes the asking price is too high, they may make an offer at a level they consider realistic. That can sometimes create difficulties.
An owner who has been looking at advertised prices and hearing that property values are continuing to rise may feel that the offer is unreasonable, or even insulting. Yet the buyer may simply be taking account of current market conditions and trying to avoid paying more than the property is worth.
Neither party necessarily intends to be unreasonable. They may simply be looking at the market from different perspectives.
This is where realistic advice and an understanding of current conditions become particularly important.
The world doesn't stand still, and neither does the Costa del Sol
We also need to remember that the property market doesn't operate independently of everything happening elsewhere.
Economic uncertainty, international politics, exchange rates and changes in people's personal circumstances can all influence decisions about buying property.
For someone who needs to move home, the decision may be relatively straightforward. But someone considering a holiday home or a second residence may decide to wait until they feel more comfortable about the future. That doesn't necessarily mean they've abandoned the idea of buying.
The nationalities of buyers on the Costa del Sol have also changed considerably over the years. We remember periods when Russian buyers were particularly prominent. Their presence subsequently diminished, while buyers from other countries became more noticeable. More recently, we've noticed an increasing American presence. You only have to walk along the Paseo Marítimo in Marbella to hear more American accents than you would have heard some years ago. German buyers have also become increasingly noticeable in our market. Fifteen or twenty years ago, we tended to associate German holiday-home buyers much more with Mallorca, but today they are an important part of the Costa del Sol property scene.
These are observations from our own experience, rather than statistical comparisons, but they illustrate how the market continues to evolve.
There may also be changes ahead in the relationship between the United Kingdom and the European Union. Any future arrangements that make it easier for British citizens to spend extended periods in Spain or relocate here could influence the property market. We don't know what those arrangements might eventually look like, but they're another reminder that today's circumstances won't necessarily be tomorrow's.
The market has always been fluid, and we see no reason why that should change.
Perhaps a little stability wouldn't be a bad thing
We don't believe that the Costa del Sol property market needs to be booming to be healthy. There are still people who want to live here, retire here, relocate with their families or enjoy a holiday home in the sunshine. The appeal of the area hasn't suddenly disappeared because transaction numbers have fallen. But it is reasonable to recognise that some buyers may be more cautious, particularly when property prices have increased substantially and there is uncertainty about the wider economic outlook.
A period in which prices stabilise, sellers adjust unrealistic expectations and buyers feel more confident about the value they're receiving might be beneficial to the market. That isn't a prediction that prices will fall, nor is it a suggestion that every seller needs to reduce their asking price.
It's simply an acknowledgement that markets change and that expectations sometimes need to change with them.
So, is it a good time to buy or sell?
We don't think there's one answer that applies to everyone.
If you're thinking about buying a property on the Costa del Sol, the important questions are what you want, what you can comfortably afford, and whether you can find a suitable property at a price that makes sense to you.
If you're selling, it's important to understand what buyers are prepared to pay in the current market, rather than relying entirely on the prices other owners are asking.
If you're uncertain, there is nothing wrong with taking time to consider your options. There will always be headlines telling us that property prices are going through the roof or that the market is about to collapse. The reality is usually rather less dramatic.
After many years selling property on the Costa del Sol, we've learned that markets change, buyers change and circumstances change. What matters is understanding those changes and making sensible decisions.
We can't control the international economy, political developments or the headlines. But we can listen to what you're trying to achieve, look at the market as it is today and help you consider the best way forward.
Whether you're buying or selling, we'd be happy to talk things through with you. Sometimes a little realism is worth considerably more than all the excitement. Call us on (0034) 952 90 52 00, WhatsApp us, or email info@michael-moon.com. We look forward to hearing from you.
