Why buy property in Nerja?

Nerja is a charming coastal town known for its vibrant lifestyle and rich cultural heritage.

The real estate market in Nerja offers a variety of options, from traditional whitewashed houses in Capistrano to luxurious properties near Burriana Beach.

Investors are drawn to Nerja’s stable market, with consistent property value growth and rental income potential. Additionally, its pleasant climate, beautiful beaches and lively atmosphere make it appealing to both residents and tourists. With increasing demand for properties, Nerja presents promising opportunities for investment and growth in the real estate sector.

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Discovering Nerja

Nerja sits at the meeting point of three rivers and has six well-preserved towers along its coast. Tourists flock here for vacations, diving and exploring the Mediterranean secrets. From boat trips to kayaking, there’s plenty to do along its 13-kilometre coastline. Local festivals like The Nerja Carnival add to its Andalusian charm, while attractions such as the Nerja Caves and Balcony of Europe offer cultural insights. With diverse beaches like El Chucho and Burriana Beach, Nerja caters to water sports enthusiasts and sun-seekers alike. Its natural beauty and cultural heritage make it a must-visit destination on the Spanish coast.
The official web for tourism explains the residents of Nerja, known as “nerjeños,” have several affectionate nicknames reflecting their coastal lifestyle. “Los balconeros” refers to their love for balconies with Mediterranean views, while “los espetos” highlights their skill in grilling sardines, a local tradition. In sports, they’re called “los boquerones” for their support of the local football team. This term originates from the town’s Roman-era name, meaning “source of water,” symbolising pride in their heritage. Other terms, like “nerjeña” for women, and nicknames influenced by geography and traditions, such as “Marinero” and “Montañero,” further reflect their identity.

These nicknames celebrate Nerja’s landscapes, architecture and gastronomy, reinforcing its cultural identity and unique charm, attracting visitors and enhancing its appeal as a special destination.

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Nerja real estate market

The real estate market in Nerja

According to Idealista, the average price per square metre for a property in Nerja stood at 3,370 euros in April 2024, marking a 9.8% increase from April 2023.

Over the past five years, property prices in Nerja have generally remained stable or slightly increased, reflecting a similar trend observed in Malaga city

In contrast, the rental market has shown more fluctuations, maintaining a long-term upward trajectory but with pronounced short-term variations influenced by tourism seasonal trends. In April 2024, the average rent reached 11.8 euros per square metre, up by 14.1% since April 2023, yet 5.4% lower than in December 2023.

Nerja also aligns with the national trend of a short supply and high demand cycle, leading to steady upward pressure on prices, rendering it a secure investment destination. By the end of 2023, the National Institute of Statistics report shows that Nerja’s population had grown to 21,913 residents, up from 21,450 in 2022. Since 2014, the municipality’s population has consistently increased.

Currently AxarquiaPlus states that Nerja boasts 8,000 registered foreigners from 84 different nationalities, comprising 33.48% of the population. These indicators underscore Nerja’s tourist appeal and the robust demand for properties, driven by increased tourism and the return of foreign buyers.

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Benefits of investing in Nerja

Investing in Nerja offers several clear benefits. Firstly, the town’s real estate market provides a wide variety of property types, accommodating different investment preferences. Secondly, Nerja’s market is stable, with consistent growth in property values and rental income potential. Additionally, Nerja’s appealing climate, stunning beaches and lively atmosphere ensure a steady demand for properties. With a growing population and increasing tourism, the town presents promising opportunities for long-term investment growth. Moreover, foreign investors can easily purchase property in Nerja, further expanding the market and providing diverse investment options.

Lifestyle perks for homeowners

Nerja remains relatively uncommercialized compared to other coastal towns in Málaga like Benalmádena or Torremolinos, making it a pleasant place to be all year-round. The town’s average annual temperature is 18.2ºC, with mild winters and not overly oppressive summers.

Named from the Arabic ‘narixa,’ meaning “abundant spring,” Nerja has beautiful beaches such as La Torrecilla, Burriana and Chorrillo, perfect for various activities.

The town has a rich history, dating back to the times of Abderramán III, with significant Arab influence seen in its architecture and culture. The famous Nerja Caves, discovered in 1958, and the scenic “Balcón de Europa” viewpoint are must-see attractions.

Nerja also offers a vibrant nightlife, particularly around Tutti Frutti square and Antonio Millón street, with numerous bars, pubs, and nightclubs. Its culinary scene is diverse, with restaurants serving both local dishes like “pescaíto frito” and international cuisines.

The town’s quality of life is high, thanks to its pleasant climate, proximity to nature in the Sierra de Almijara and active social scene. Despite its growing popularity, Nerja retains its traditional charm, making it an appealing destination for both tourists and residents.

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Investment growth and opportunities

Nerja attracts European retirees seeking a retirement destination, holiday home buyers and remote workers. This heightened demand has not only attracted increased foreign investment but also propelled property prices upwards, positioning Nerja as a prime destination for investors seeking lucrative returns, particularly in its high end real estate segment.

Tourist visits to towns in Nerja are measured by the INE from hotel occupation records, which only account for overnight stays and not day trips. In 2023, Nerja received 172,909 Spanish residents and 679,272 non-residents, totaling 852,181 visitors. Investing in tourist properties in such high-demand locations offers substantial financial gains through rental income and property value appreciation. This favourable market of stable and strong demand for tourist properties, despite seasonal demand fluctuations. Investors benefit from diversified investment options, leasing flexibility and better property value over time.

The financial technology company Stessa explains that to calculate your return on investment (ROI) in real estate, several key values are essential. Net Operating Income (NOI) represents the profit after subtracting operating expenses from gross income. The capitalization rate, which is the ROI rate, is derived by dividing the NOI by the property price. Annual cash flow indicates the yearly profit or loss after all expenses, including the mortgage are paid, calculated by subtracting debt from the NOI. The annual gross rent multiplier (GRM) assesses the investment value for rental properties by dividing the total sales price by the gross annual rent. Profitability is measured by the difference between the selling price and the investment (capital gains) or between rental income and expenses (cash flow). In February, Spain’s gross rental yield was 6.18%, slightly down from 6.30% the previous year but up from January’s 6.17%, according to Fotocasa. This yield varies, with 7.72% in Lleida and 3.44% in Donostia-San Sebastián and an average of 6.1% in Andalucia.

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The Buying Process in Nerja

At Tejada Solicitors, we understand the importance of meticulous attention to detail in property transactions. Our dedicated team conducts comprehensive due diligence, carefully examining all legal aspects of the property buying process. Upon completion of our research, we provide clients with a detailed legal report covering critical areas, including:

Verifying the property’s registration in the Property Registry under the seller’s name with the correct property description.

Ensuring the property is free from any burdens such as liens and mortgages and is fully compliant with all tax obligations.

Confirming the absence of residing tenants in the house, ensuring a smooth transfer of ownership.

properties in Nerja

Conducting a thorough review of urban planning files and planning licenses, supervised by our expert architect (Property condition survey).

Reviewing the accurate registration and timely payments of all taxes and utilities in the previous year.

Ensuring there are no outstanding debts associated with the property or the community of owners.

In Spain, property debts transfer to the new owner during the sale. Hence, it’s essential to ensure that the property is clear of any encumbrances, especially mortgage liabilities. Any existing debts must be accounted for in the contract terms and promptly resolved upon the conclusion of the deal. Tejada Solicitors ensures legal soundness, freedom from encumbrances, and readiness for sale.

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José María Oliva
Spanish and English speaking – Solicitor

Legal Aspects and Considerations

Contemplating a property purchase in Nerja? You’ll need to meet certain prerequisites, including holding a valid passport, obtaining the NIE number (Foreigner Identification Number), and having a Spanish bank account.

Having an NIE is a prerequisite for property acquisition in Spain, irrespective of your tax residency status.

Once the property purchase is concluded, having a Spanish bank account is essential for managing utility and tax payments through direct debits. We recommend opening the account at least a month before signing the purchase deed to ensure smooth processing of contract changes and bill payments.

Tejada Solicitors provides assistance in obtaining the NIE and establishing a Spanish bank account. A general Power of Attorney simplifies the process, enabling us to act on your behalf.

Understanding the comprehensive costs associated with property transactions is crucial. Ensure your property lawyer furnishes detailed information on current and future expenses and taxes. Here’s a breakdown of typical costs and taxes:

VAT (IVA) or Stamp Duty in Spain: 7% for existing properties; 10% for new properties, along with an additional 1.2% for documented legal acts.

Notary fees.

Land Registry fees.

Legal fees for property acquisition. Our rates can be provided upon request, with no obligation.

Upon completion, our services extend to facilitating utility contract transfers and managing property-related tax payments, and all are managed seamlessly through your Spanish bank account.

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At Tejada Solicitors, we are well aware of the intricacies surrounding urban planning in Spain, which is why we consistently advise our clients to engage specialized lawyers and architects who are well-versed in real estate law.

Thorough pre-purchase checks on the urban situation of the property you’re interested in acquiring are vital steps in the buying process and should be conducted before committing to the reservation contract. Rushing into such agreements is discouraged; they should clearly outline sales conditions and be refundable.

Our team of real estate law experts at Tejada Solicitors meticulously scrutinizes all property documentation to ensure its complete legality, providing you with the assurance to acquire it without any encumbrances.

During the property acquisition process in Spain, you may also require an architect to assess the physical state of the property and identify any potential issues. In certain cases, these issues may be significant enough to warrant reconsideration of the purchase. Therefore, we recommend all our clients obtain a property report before finalizing the reservation contract.

Additionally, we suggest seeking guidance from a local real estate agent to assist you in finding a property that suits your needs and financial plans.

The tax aspect of the sales process is equally crucial. If you intend to establish residency in Spain, it’s essential to carefully study and plan for the tax implications of your relocation and how the sale or use of your assets abroad may affect your finances, taking into account double taxation agreements that may be in place.

For a secure and low-risk investment, it’s essential to seek support from professionals, including real estate agencies, lawyers, tax advisors, and architects, who will guide you through every step of the purchasing process.

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FAQ’s

In Nerja, Capistrano offers mostly whitewashed houses with Andalusian charm and communal swimming pools, featuring well-maintained landscaped areas. It is located 10-15 minutes from the town centre, with high community maintenance costs and generally no parking issues. Burriana, centred around the popular Burriana Beach, provides terraced houses, villas and apartments, with various activities like kayaking and jet skiing, making it an expensive and high-demand area, though quieter in winter. Nerja-Centro consists mainly of apartments or flats. Almijara features terraced houses, while Torrecilla offers various upscale properties. Pueblo Rocío has apartments, townhouses and villas. Lastly, Punta Lara, on the outskirts between Nerja and Torrox, provides various often upscale homes, excellent sea views, a peaceful environment and is popular among foreign buyers.

Yes, foreigners can buy property in Nerja. Residents and non-resident foreigners can buy property in Spain.

Investing in tourist properties in popular areas like Nerja can bring substantial financial rewards through rental income and property value increases. The demand for these properties is strong and steady, even with seasonal changes. Investors enjoy a range of options, flexible rental terms and the potential for long-term property appreciation.

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