According to the latest figures from Spain’s National Institute of Statistics (INE), residential property sales in Spain increased in May to their highest level for three years. However, the data also shows that new home sales have declined dramatically.

There were 26,455 homes sale in May, an increase of 5% on last year and 11% on 2013. But while resale market was up 34% over 12 months, new home sales fell 42% to just over 6,000.

While some industry experts think that buyers are limited by the choice of high-quality new homes available, demand is growing for new homes in Marbella, where developers are building again.

Pia Arrieta, partner at DM Properties Knight Frank Marbella, says: “Genuine interest in good-value, good-quality, well-located plots of land is on the increase. Land prices in Spain climbed 5.2% during the last quarter of 2014 and sales increased significantly compared with the same period in 2013.”

He adds that while the strong pound is persuading UK buyers back into the market, who might otherwise be looking at other investments, there is also strong demand in the Costa del Sol from other northern Europeans, especially from Scandinavia, Germany, Holland, Belgium and Russia.

“The demand for land stems from a growing appetite amongst end users’ for turnkey, contemporary products with the latest gadgets and luxuries. Competitive construction costs and the decline in land prices in recent years has spurred developers on,” she says.

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