At the far western end of the coast, Estepona sits quietly and slightly off the Costa del Sol radar. Like its glitzy and glamourous neighbour, Marbella, this traditional fishing resort offers just as much quality of life but does so discreetly and inclusively: Estepona is all about something for everyone, tourists and residents. As a result, it’s one of the most up-and-coming spots on the Costa del Sol. But does this make buying a property in Estepona a good investment?
At The Property Agent, we certainly think so and judging by the surge in sales in the resort over the last few years, we’re not alone. However, if you’re not convinced or need some persuading, we’ve put together some compelling reasons why buying in Estepona makes a good investment.
The Estepona philosophy
Ultimately, a destination reflects the mindset of the locals and those in charge of running it. In Estepona, you’ll come across the philosophy throughout the resort and behind everything the council brings into play.
For the current Estepona Mayor, José María García Urbano, “quality of life” isn’t just a set phrase in Estepona, but a paradigm reflecting the new model of a town. He also emphasizes that the pillars of Estepona are “the well-being of the people who live there and those who visit it.” Consequently, sustainability is also a watchword for the resort.
Bottom line? Estepona is looking to continue to build on solid foundations for future generations of residents and tourists, giving investors trust and confidence.
The Estepona amenities
Whether you’re investing in buy-to-let (holiday rentals or long-term lets) or in a second home, or seeking capital appreciation, local facilities are a key consideration in choosing a location. Estepona ticks all the boxes in these criteria, having transformed the town over the last ten years.
The entire town centre has had a complete facelift, with many streets becoming pedestrian-only and all getting a floral upgrade. The flowers join the tens of thousands of plants, shrubs and trees that line the Estepona boulevards, earning the town the well-deserved nickname of the Garden of the Costa del Sol.
Work has also improved the seafront promenade and access to the town centre. In addition, Estepona has seen new leisure and sporting infrastructure in the form of the Orchidarium and Arroyo Enmedio sports complex. The town also has also completed 21km of boardwalk running along its coastline, from the Port to El Saladillo in the east.
In terms of public facilities, the first public hospital in Estepona opened in late 2022 and joined several private establishments such as Hospiten.
Latest additions
In the last six months, Estepona has also welcomed some iconic additions to its skyline and infrastructure. They include:
A new town hall
The building is covered in a striking white lattice structure designed to make it more sustainable. The fun element comes in a slide that connects the fifth floor with the fourth.
Mirador del Carmen
This 15-storey building opened just before Easter 2023 and already stands as an icon on the western section of the Estepona seafront. It houses a library, music school, auditorium and exhibition space.
The latter began its artistic journey with a unique exhibition of 19th and 20th-century Spanish paintings belonging to Baroness Carmen Thyssen, whose works are already on display in dedicated museums in Madrid and Malaga. The Mayor described the inaugural exhibition and the association of Estepona with the Thyssen Foundation brand as “a leap in cultural and touristic quality beyond compare”.
The Mirador del Carmen also houses a viewing platform on its rooftop, with 360-degree of the Mediterranean, and Sierra Bermeja mountain range, with Gibraltar and the Morocco coastline on the horizon. The restaurant will complement the views in the near future.
Port-town centre connection
Cut off by a busy highway, the attractive Estepona Port has traditionally been a separate entity from the rest of the town but the recent extension of the seafront promenade has joined the two. A flower-filled pedestrian boulevard now brings the two locations together, allowing residents and tourists to walk easily and pleasantly from one to the other.
Affordable parking
One of the drawbacks tourists face in many town centres is prohibitively expensive parking. Estepona has resolved this problem by introducing underground parking spaces that cost €1 a day. This measure is already successfully in place in other parts of the Costa del Sol, such as Mijas village.
High-end beach clubs
The Estepona coastline has already attracted several of the best beach clubs on the Costa del Sol, with well-known names such as Sonara Beach, Kempinski and Spiler part of the summer sunshine scene. In 2023, they were joined by Beso Beach, a luxury beach club brand already present in the Balearics and Tulum in Mexico.
In the pipeline
Estepona also has its eyes firmly set on the future well-being of residents and visitors. Up-and-coming projects include:
More sports facilities at Arroyo Enmedio – tender is out for €4.3 million contract to extend the complex, including seven more football pitches.
Atlas American School of Malaga – the first school offering an American curriculum on the Costa del Sol is due to open in September 2023 in the Selwo area of Estepona.
Giant sports and residential complex – the President of Globalia, Juan José Hidalgo, until recently the owner of Air Europa, has announced investment of €1,200 million in a project to turn Estepona into “the world’s sporting city”. Construction work on the hotel, apartments and sports facilities is due to start sometime in 2023 and take four to five years.
Bottom line? Estepona has world-class facilities in place and in the pipeline, ensuring its appeal for both residents and tourists in the short and long term.
The Estepona property market
We’ve already established that Estepona fits the criteria for the right mindset and provides the necessary facilities and amenities to sustain resident and visitor figures in the future. But what about the property side of things?
Busy sales in Estepona
Like most of the Costa del Sol, Estepona experienced a hectic season for sales in 2022. Some 3,647 properties changed hands in the resort last year, up 16.4% on 2021. Estepona has become increasingly popular over the last decade, with transactions rising every year. Even in 2020, with the pandemic in full swing, 2,515 properties sold in the town, 7.6% more than in 2019.
Buoyant new-build market
Unlike its neighbour Marbella, Estepona suffers from no shortage of building land and has a council keen to facilitate new licences in the resort. In 2022, building applications were processed for 1,067, the highest since 2019 and up 213.8% compared to 2021.
Most Spanish developers are present in Estepona and building complexes that range from practical apartments, such as those at Symphony Suites and Sunset Bay, to cutting-edge designer pads, like those at Ikkil Bay and The Sapphire. Options include penthouses, villas and apartments in a wide variety of locations, including the frontline beach.
Steady capital appreciation
Again, in common with the rest of the Costa del Sol, property in Estepona has experienced constant price rises. However, in Estepona they have been slower than in Marbella, for example, adding steady appreciation to real estate in the resort.
According to the property portal Fotocasa, asking prices in Estepona in March stood at an average €3,208 per square metre. Properties in Seghers had the highest price tags at €4,766, while those in Playa Bahia Dorada had the lowest at €2,986.
In its latest property report, OMAU reveals that real estate in Estepona experienced an 11.3% rise from December 2007 (the height of the last property cycle) and March 2023. In the year to Q4 2022, prices went up by 15.6% to an average of €3,173. The last quarterly increase (Q4 2022 to Q1 2023) was considerably more moderate at just 0.6%.
Rising rental prices
If you’re looking at buy-to-let, Estepona offers promising returns.
Long-term rentals – Estepona currently has one of the hottest markets in Spain, with demand at unprecedented levels. In January, average rates stood at €14.77 per square metre, 40.8% higher than a year earlier, according to Fotocasa. By March, the rate had slowed slightly, but monthly rentals for a 2-bedroom apartment averaged €1,609. According to Fotocasa, the average return from buy-to-let in Estepona in 2022 was 5.1%.
Holiday lets – Estepona has a growing tourist industry and as a result, a buoyant vacation rental market. According to Holidu, the occupancy rate among holiday lets in the town reached 82% during Easter 2023, when hotels in Estepona produced one of the top five returns in Spain. According to the PropTech, SUOMMA, owners can expect to make around €16,000 a year on a 2-bedroom holiday let, the equivalent of 7.3% a year.
Bottom line? All the above property metrics indicate a busy but stable property market in Estepona. Capital appreciation is steady, and rental returns, are healthy. In addition, buyers have access to a thriving new-build sector, offering a wide range of homes in different locations.
The answer is yes
Given all the above, we firmly believe that buying a property in Estepona is a good investment, whether you’re looking for an addition to your portfolio or a home to enjoy yourself. The resort offers excellent amenities now and in the future and has a consolidated real estate market that currently shows no signs of overheating.
All you need to do now is find the property to move you (or your portfolio). We have a long list of options, all offering investment potential. Get in touch to start the search to find yours.
Sources:
OMAU https://static.omau-malaga.com/omau/subidas/archivos/1/5/arc_8751.pdf
Others Sur in English, Málaga Hoy
Sales stats https://apps.fomento.gob.es/BoletinOnline2/?nivel=2&orden=34000000
Buy-to-let returns https://www.malagahoy.es/malaga/comprar-vivienda-malaga-costera-rentable-rincon_0_1700830325.html
Easter occupation levels https://www.laopiniondemalaga.es/malaga/2023/04/05/malaga-destinos-turisticos-buscados-durante-85650889.html
