Why Spain's Málaga is becoming a victim of its own success

Málaga has become the number one choice for many internationals looking for a better life abroad. So much so that eight out of 10 new residents moving to Málaga are currently foreigners, according to recent data from Spain’s National Statistics Institute (INE).

Its population is growing exponentially. Stats show that in 2022 Málaga welcomed a total of 56,242 inhabitants, of which 44,656 were foreigners and 11,586 were nationals. 

This is a staggering number and shows just how popular the Andalusian city has become, as well as explain why it was voted as this year’s best city for foreign residents in the InterNations Expat City Ranking 2023.

So what’s behind Málaga’s success and why do so many people want to move there?  

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Málaga has been popular with holidaymakers since the 1960s, being the gateway to the Costa del Sol, loved for its endless sandy beaches, near-perfect climate and sunny days.  

While there has been a steady stream of foreigners wanting to make the city and its wider province home ever since, in recent years its popularity has really exploded.

In 2021, Google announced that it would establish a hub in Málaga, giving rise to the moniker – the ‘Silicon Valley’ of Europe. Other international companies soon began to follow in the internet giant’s footsteps, planning their own Malaga bases, brands such as Vodafone, Citigroup, Banco Santander, GP Bullhound and EY.

“The choice of Málaga to host this new hub is not coincidental,” explained Google. “This region has great talent, a vibrant startup ecosystem and incubators and accelerators of companies that have been cultivating the technological fabric for a long time”. 

Japanese TDK, an electronic components manufacturer also announced in March that the first centre of excellence on artificial intelligence and machine learning will open in the Andalusian city, where it already had its headquarters.

Today, Málaga TechPark is home to 630 companies, 60 of them international. It employs over 20,000 professionals and represents 1.65 percent of GDP and employment for the region of Andalusia.

Málaga TechPark is now home to more than 60 international companies. Image: Ayuntamiento de Málaga

The pandemic also gave rise to the number of remote workers, now able to do their jobs from anywhere in the world and looking for the perfect city with a great climate, beaches and international connections.

In 2020, Forbes magazine listed Málaga among the top twenty cities in the world that were best for Americans to move to, as well as invest and work in. Málaga's town council even launched a new platform in 2021 to help digital nomads, www.malagaworkbay.com, which had received more than 160,000 visits by the end of 2022.

Since Spain’s digital nomad visa has been available since the beginning of 2023, even more remote workers have been looking to make Málaga their base, attracted by not only the international companies, but also new startup culture and presence of services such as co-working spaces, good internet connections and co-living places, as well as events and social interactions with other nomads.

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Interestingly, Málaga’s lowest ranking in the InterNations survey was for working, coming, in 13th spot in the world – only average. It also ranked very close to the bottom (41st out of 49) for the local job market.

Obviously for foreigners with a job lined up for them in Málaga or who have a remote job or business with international earnings, Málaga's local employment struggles aren't an issue for them.

With so much money being pumped into Málaga, the city's other cultural and gastronomic offerings are growing and getting noticed.

The birthplace of Picasso is currently considered the third Spanish city with the best cultural offering after Barcelona and Madrid by experts on the matter La Fundación Contemporánea. Theatre plays, music and film festivals, museums exhibitions, there's lots going on.

Spanish actor Antonio Banderas, who's from Málaga, performs in the musical "Company" at the Soho CaixaBank Theatre in Málaga. (Photo by JORGE GUERRERO / AFP)

 

The Andalusian city is now also well recognised for its culinary contribution, with The Condé Nast Traveler Readers’ Choice Awards 2023 naming Málaga as the fifth best city for food in the world. The US travel magazine praised the city for its famous grilled sardines eaten at beach-side chiringuitos; as well as ajo blanco (a cold soup made with bread, almonds, garlic and olive oil) and sweet wines.

It was also recently announced that American celebrity chef Charles Webb would be filming a documentary series in Málaga, highlighting the city's culinary wonders and aiming to attract more digital nomads.

Then there's the Spanish lifestyle. In the InterNations survey, Málaga mainly ranked higher than other cities in the survey for its quality of life, work-life balance and weather, as well as local friendliness and ease of making new friends. It also scored well for leisure options, being the gateway to the Costa del Sol.

So what's not to love?

Well, despite this rise in popularity, it’s not all good news for many local Malagueños who are suffering as a result.

Daily costs have shot up in the southern city throughout 2023, especially rent. According to a study by HelloSafe, Málaga is the second most expensive province in the country when compared to the average salary, just behind Barcelona. It estimates that 81 percent of the average salary in Málaga is used on living and rent. 

Rental prices have increased by 16.5 percent compared since the end of 2022 and have now reached an average of €15.5/m2, stats from property portal Idealista show, while the cost to buy a home in Málaga has increased by 11 percent to an average of €3,049/m2, reaching a new historic high.

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The number of tourist apartments and Airbnb rentals have also skyrocketed as a result of the city’s success and the streets have become plastered with lock boxes so people can check-in themselves. There are now so many that the City Council wants to regulate the use of these devices to prevent them from being attached to public structures.

There are now two tourists for every five locals in Málaga. Photo: Jorge Guerrero/AFP

 

Tourist accommodation not only drives prices up for the locals, but means there are fewer properties available on the rental market too, leaving Spaniards with no choice but to look further out or in nearby villages. There are now two tourists for every five locals in Málaga, according INE.

This issue is only made worse by the number of remote workers and digital nomads flocking to the city, willing to pay well above average for accommodation, simply because they can, earning usually much higher salaries than any local from their jobs in Northern Europe or the US.

Malagueños appear to be the primary victims of their city's international popularity and economic success, a double-edged sword not unlike what has happened in Barcelona over the past two decades.

Couple this with sky-high inflation in Spain for the last two years, and locals in Málaga are now spending €426 more a month than in 2022.

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