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An estimated 3,000 estate agents in Malaga will go out of business this year, according to Spain’s Professional Real Estate Agents Association.

Óscar Martínez, president of the trade body, told the Opinion de Málaga newspaper that there are now more than 10,600 real estate agents across the province. However, higher prices and rising interest rates have slowed the market and it is taking much longer to sell (up to nine months).

Mark Stucklin, head of property information website spanishpropertyinsight.com, said: “Many people set up as estate agents, often without any relevant know how or training. Another industry expert has estimated that as many as half of all real estate agencies will close during the coming slowdown.

“The market in key parts of Málaga Province, for instance popular tourist areas on the coast (but not necessarily in Malaga city) appears to be very quiet. However, it is my impression that buyers are still active when attractive property is reasonably priced, so I wouldn’t say the market in popular areas is in freefall. When vendors drop prices by 20-30%, attractive properties sell quickly, so there appears to be a solid price floor. But there are also some pockets of unattractive over-development of mediocre properties in poor locations where prices may have to fall more than that to get anyone interested.”

Chris Mann, director of communications for Murcia-based golf developer Hacienda del Alamo, said agents would gain more from Spain’s emerging regions. “It’s been clear for a long time that Malaga has been in decline,” he said. “However, with areas such as Murcia becoming Spain’s new number one region, it will attract not just builders and potential purchasers, but agents as well.”

Richard Castro, commercial director for Grupo GMB, also suggested that Spain’s new markets might provide a solution, saying: “As with any market stabilisation after sustained years of growth there is going to be financial turmoil for a great many estate agents and indeed related businesses. It is important to underline that Spain is still the number one destination for UK buyers with greater numbers looking to relocate and that the Spanish national market is healthy. The investment market is driven by price and returns, inland Spain could be part of a solution for the moment.”

Costa del Sol developer Alanda Homes insists there are still massive opportunities in the luxury end of the Malaga market, but has hinted it will look at other Spanish regions such as Murcia.

Stucklin believes that relocating to new markets is not the answer, as he explains: “The solution is not to try and find a new area of Spain where the market is strong. The solution for agents in Malaga is to batten down the hatches, control costs, and improve customer service. A good place to start would be to only list properties at realistic prices, and provide buyers will all the documentation and information they need to make informed choices.” Story from OPP (subscription required)