Torremolinos: A Strategic Alternative?

The municipality of Málaga City has recently introduced a three-year pause on the issuing of new short-term rental licenses. This decision, aimed at addressing housing supply pressures and resident concerns, has direct implications for investors in the wider Costa del Sol market. One immediate consequence is that investors seeking to operate legally in the short-term rental (STR) sector will need to look beyond Málaga City for opportunities.

This is my case for Torremolinos, the adjacent municipality, and arguable the O.G: tourist destination of the Costa del Sol. Don’t be fooled by the very ugly parts of the town centre. My case for Torremolinos isnt bassed on being a cheap alternative, but likely to benefit from the suspension of new licenses being issued in Malaga City. The beach areas either side of the town centre have a lot to offer even in 2025.

Torremolinons stands out as a logical alternative. Its location and infrastructure make it particularly attractive:

• Connectivity: Torremolinos sits directly on the coastal train line linking Málaga City, Málaga Airport, and Fuengirola, offering straightforward access for international arrivals and day visitors.
• Proximity to Málaga Airport and Plaza Mayor: At less than ten minutes from the airport and adjacent to the major Plaza Mayor retail and leisure complex, Torremolinos combines convenience with lifestyle appeal.
• Coastal Setting: The Playamar–Los Álamos stretch provides a flat, beachfront environment, excellent sandy beaches, and a growing stock of new residential developments suitable for investment.

Market Performance: Torremolinos in Context

Recent data shows that Torremolinos has performed strongly in the short-term rental segment, particularly in terms of occupancy. A comparison with nearby municipalities illustrates its position:

Sources: AirDNA, Idealista, Cushman & Wakefield (2024–2025 market data).

From this comparison, Torremolinos offers the strongest balance of occupancy and acquisition cost. While Marbella continues to command the highest nightly rates on the coast, its elevated property values reduce yield efficiency. Benalmádena and Fuengirola both perform steadily, but neither delivers the same combination of consistent occupancy and attractive entry price as Torremolinos.

My pick: Playamar–Los Álamos: A Focus Area

Within Torremolinos, the Playamar–Los Álamos corridor presents a particularly compelling opportunity. This zone combines high-quality beaches, new residential development, and accessibility via both the coastal train and the main road network. The area’s flat topography enhances its appeal to a broad visitor profile, while its proximity to nightlife, dining, and leisure facilities further supports rental demand. Now one should be careful, as on a weekend much of the beachside turns into a fairly noisy nightlife hotspot for young people, so for this reason I´d look at something not frontline beach. Even the old but very well kept towers of Playamar have held their value and the gated community continues to be very well kept.

Market Overview – Mid 2025

Torremolinos is experiencing significant growth in its property market. As of mid-2025, the average asking price for residential properties in Torremolinos stands at €3,675 per square metre, reflecting a 10.66% increase from July 2024, according to Idealista. It should be noted that prices in Torremolinos have held steady right through the crisis with relatively high prices for the age of much of the inventory. In recent years, more new developments are being built throughout, but at fairly high prices.

Buyer Demographics

Torremolinos attracts a diverse range of buyers. Foreign nationals account for approximately 28% of property purchases in Málaga province, with Dutch, Swedish, and British buyers leading the foreign buyer demographic. Domestic buyers from other provinces of Spain also contribute to the market, accounting for an additional 12% of property purchases.

Outlook

With Málaga City closed to new short-term rental licenses for the next three years, demand is expected to redirect to adjacent areas with similar convenience and appeal. Torremolinos, and particularly Playamar–Los Álamos, is well positioned to capture this demand. For investors, the municipality offers:

• Solid occupancy rates.
• Competitive ADR compared to acquisition costs.
• Strategic location next to Málaga City and Airport.
• A pipeline of new housing developments in prime beachfront settings.

In relative terms, Torremolinos currently represents one of the most efficient yield markets on the Costa del Sol for short-term rental investors, particularly when benchmarked against its neighbours.

*** disclaimer: this isn’t investment advice, just an educated conclusion… ***