Despite Eastern European markets opening up and a rush to buy in Valencia, the Costa del Sol remains extremely popular, with one of the fastest growing populations in the European Union (EU). Indeed, the region's population is expected to continue rising over the next decade by as much as four million.

But the influx of buyers and permanent residents is reshaping the contours of the Costa's property market. The knock-on effect of peaking house prices along Golden Mile in Marbella means the search for villas, townhouses or apartments has taken Brits further afield in their hunt for a bargain, and local Spanish authorities are making the most of it.

With the  encouragement of the mayor Francisco Salado, for example, planning permission was granted in July for 48 apartments in low-rise buildings on the  summit of a little hill known as Altos de Noctiluca in the coastal town of Rincon de la Victoria, which boasts its own statue of the Little Mermaid and an 18-hole golf course. Launch  prices for the three- and  four-bedroom apartments are approximately 300,000 euros.

As buyers continue to fan out throughout Costa del Sol to smaller resorts such as Rincon de la Victoria, the average property price in some popular areas is beginning to cool. In Marbella, for example, the price per square metre of constructed property has dropped by 1.7 per cent, according to property consultant Salvago, meaning the market has stabilised somewhat after soaring prices over the past few years.

Official figures reveal that on the eastern Costa del Sol, prices have risen by 3.9 per cent in the last three months and 23.4 per cent in the last year in Malaga. On both coasts the rise in prices has been 16 per cent on average from last year. Inland on the Costa, Antequera, Campillos, Pizarra, Coín and Cártama, have all seen rises in property prices around the 20 per cent mark, four per cent more than the coast, although the total volume of sales is lower.

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Read other articles about Spain:
Sleek prospects for Valencia
Discovering property in inland Spain
Property bargains in the Spanish Costas

Article published on 2 August 2006