- 37 % of Spanish rental homes now exceed €1,500/month.
- Only 12 % of rentals are below €700/month showing a major supply crisis.
- The Costa del Sol (Málaga region) is among the provinces where >35 % of rentals cost more than €1,500.
- Investors should target properties capable of commanding €1,000+ per month.
- Strong demand, limited supply and tourism make Costa del Sol increasingly attractive for rental investment.
Introduction
The Spanish rental market is undergoing a dramatic transformation, and savvy investors in the region of the Costa del Sol and beyond can turn this crisis into opportunity. According to a recent report by Pisos.com, 37 % of rental homes across Spain are now priced at over €1,500 per month Source: Sur in English, making that the largest price segment in the market. Meanwhile, only 12 % of homes rent for under €700, signaling a serious shortage of affordable supply. For real-estate investors and property professionals focused on Costa del Sol, this trend has direct relevance for both long-term buy-to-rent strategies and holiday-let investment models.
The Current Rental Climate in Spain
The regions hardest hit by high rental costs (with more than 35 % of rentals above €1,500) include Málaga, which sits within the Costa del Sol zone.
In Spain overall, nearly six out of every ten homes for rent cost more than €1,000 per month: 37 % exceed €1,500, 24 % fall between €1,000-1,500.
The most affordable segment (under €700/month) represents only 12 % of the market.
In major tourist and urban regions such as Madrid, the Balearic Islands, the Basque, the Canary Islands and Catalonia, there are virtually no homes for rent under €700/month (0 % in Madrid and Balearics).
Why This Matters for Costa del Sol Investment
- Strong rental demand – The Costa del Sol is a prime tourist and expatriate destination, meaning demand for quality rental property remains high.
- Supply shortage & rising prices – With national data showing acute supply constraints, regions like Málaga may see stronger upward pressure on both rentals and sales.
- Investment return potential – For investors acquiring property on Costa del Sol (whether for long-term rentals or holiday lets), the high-rental segment (>€1,000/month) is increasingly dominant, improving rental yield potential.
- Geographic mobility & relocation trends – As noted by the director of research at Pisos.com, “Large cities and tourist capitals concentrate the highest prices … this reality is increasingly influencing the geographical mobility decisions of many in Spain.” Costa del Sol can benefit from overflow demand from more expensive capitals.
For more insights on why this region attracts global investors, see our detailed article on Why Invest in Costa del Sol Real Estate.
Key Investment Considerations for the Region
Choose the Right Property Type
- Focus on ready-to-rent apartments in popular coastal towns (e.g., the Costa del Sol’s resort hubs).
- For larger budgets, villas or town-houses that can command premium holiday-let rates.
- Ensure modern finishes and full furnishing as high-end tenants expect turnkey solutions.
Explore our latest apartments and villas for sale in Málaga province ideal for long-term or holiday-rental investors.
Target the Rental-Segment > €1,000/month
Since nationally the segment >€1,000/month dominates (≈ 60 % of all rentals) and the sub-€700 segment is shrinking, targeting properties that can reasonably achieve €1,000-€1,500 or more per month makes sense. This aligns with the trend reported by Pisos.com.
Location & Accessibility
- Proximity to the coast, airports, amenities and transport improves both long-term rental and holiday-let appeal.
- Look at neighbourhoods still under-price relative to prime hotspots, but with strong demand fundamentals.
Learn more about local attractions at Visit Costa del Sol
Regulatory & Fiscal Outlook
- Spain’s housing market faces a structural imbalance: rising demand (immigration, tourism, job creation) and limited supply.
- Investors should stay abreast of local rental regulations, tourist-letting rules and tax incentives on the Costa del Sol.
Final Thoughts
With Spain’s rental market under pressure and the high-end segment becoming dominant, the Costa del Sol presents a compelling arena for real estate investment. Whether targeting long-term tenants (local professionals, expatriates) or holiday lets (tourists, short-stay), aligning your property with the >€1,000/month section of the market and choosing a strong location can deliver solid returns. As the national report from Pisos.com shows, only a small fraction of rentals are under €700/month, and major hubs are now almost entirely above €1,000/month. For agents and investors on the Costa del Sol, now is a moment to act – to leverage demand, location and yield.
To maximize returns and navigate local regulations, contact our Buy-to-Rent Investment Advisory in Costa del Sol team for professional guidance.
Source: Pisos.com rental market report.
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