Profile: Malaga Malaga has the Picasso musuem, beaches, a Moorish palace and authentic Spanish culture. And although it's rapidly becoming chic, properties are lot cheaper than in Marbella. Jack Hanna on the attractions of investing in the capital of the Costa del sol

For all the hundreds of thousands of northern Europeans who troop through its airy and efficient international airport en route to the Costa del Sol, Malaga city itself has managed to keep a low profile.

An ancient city, founded by the Phoenicians during their mining forays into the Iberian peninsula, Malaga was an important Moorish port city until its fall to the resurgent Catholic monarchs in the fifteenth century.

It experienced waves of prosperity and decline during the following centuries but was in a parlous state after the Spanish Civil War and during the early years of the Franco dictatorship.

The tourism boom of the 1960s created the modern city of Malaga (population: 586,000) as the point of entry to the southern coast of Spain but, curiously, never made Malaga city itself a prime tourist destination.

This anomaly is slowly being remedied as Malaga flaunts its superb natural setting, spruces up its considerable historic heritage and enriches its cultural offering (the Picasso Museum, botanic gardens, a varied musical life and an important film festival, to give just some examples).

In the midst of all these transformations, Malaga remains a resolutely Spanish city and not many Irish or British nationals have considered Malaga as a location for buying an apartment or house for holiday or long-term residential use. In recent years, however, several factors are combining to induce foreign buyers to eye Malaga as a possible location.

"It may as yet be only a trickle but the signs are there," says Ignacio Ramos Luque, of the legal firm Criado & Kraus, which deals with a lot of Irish and British clients on the coast to the east of Malaga.

One reason is price. Let's be quite clear. Malaga city may have been a cheap location five or 10 years ago but prices have risen around 10 to 15 per cent during this period ("an incredible rise", one estate agent told me - "brutal", the Spanish word she used, probably better expresses the pain of this for local purchasers) and Malaga now ranks fourth among Spanish cities in terms of the cost of purchasing good residential property.

However everything is comparative. As Cristina Suárez Molina of the Crooke & Caffarena group explains: "Naturally, if people discover that an apartment that would cost them €450,000 in Marbella can be got for around €275,000 in Malaga, then they are bound to be interested."

So Malaga city may be considerably better value than some of the chic locations in Marbella but it is not cheap. Prices are rising steadily, at times alarmingly, but the plus side of this is that the trend shows no signs of abating and a property purchased now is likely to more than hold its value.

The natural setting of Malaga and recent expansion of the city are crucial in determining the areas likely to be of interest to Irish purchasers.

To the north of the city is the protected zone of the mountains of Malaga with a narrow gorge for the river Guadalmedina and the motorway to Granada and Seville. To the west there is a line of steep but lesser hills, below which are the former fishing villages of Pedregalejo and El Palo.

The huge modern expansion of Malaga took place to the west where the hills and mountains are more distant and a lot of land has been reclaimed from the sea. The development here has been, in general, very intensive, utilitarian and unattractive.

The historic city centre is undoubtedly the area that offers the most interesting "alternative" offer to living on the coast. The elegant and monumental parts of the city centre include the beautifully renovated Calle Marqués de Larios, and the whole area around the Picasso Museum, the Alcazaba (the Moorish palace), the Roman amphitheatre and the Cathedral.

Perhaps even more charming, and cheaper, places to investigate are the narrow side streets. Up until recently, elegance and decrepitude lived cheek by jowl in many of these streets but urban renewal grants and rising prosperity are gradually transforming these areas. A surprising feature of Malaga as a coastal city is that the historic centre does not look towards the sea. However, many of these narrow streets open up to wonderful views of the mountains to the north.

Obviously, if you want to be blessed with the glorious light of the southern Spain during your time in Malaga city, you need to buy in the upper storeys of the buildings in these narrow streets. Another thing to look out for is noise (motorbikes, especially) and littering from the infamous botellón (street drinking, especially in the Plaza de Merced area).

An area near the city centre that has a lot of charm but that has not suffered the gentrification of the centre is Victoria. An apartment here with views of the Alcazaba and the twice-a-year flowering jacaranda in Plaza de la Victoria would be Spanish inner city living in style.

Maintaining a car in the city centre is likely to involve the additional cost of buying a parking space which can cost around €18,000, according to Cristina Suárez Molino.

Moving towards the sea, the Malagueta is one of the most sought-after locations in Malaga. The area around the bullring and the Paseo de Reding is attractive but the main lure is what is in effect a city centre beach with stunning views, especially at night, of the eastern coastal ring and the overhanging hills. San Antón, the "Twin Peaks" of Malaga, is particularly distinctive.

The next area along the sea, Pedregalejo combines low-rise buildings close to the beach and leafy streets with detached houses. Pedegalejo is also the base for many language schools (the teaching of Spanish is a big industry in Malaga) whose students provide a steady rental market for many owners of apartments. Development in El Palo has been much more mixed, with high-rise blocks built just in from the warren of small fishing cottages close to the sea. However, there are also attractive developments and the cove-like beaches are especially safe for children.

After El Palo, we have to take to the hills. Housing developments are snaking up the hills all along the eastern strip of Malaga, with debate still raging over the degree to which this should continue. Established suburbs like Limonar, El Cerrado de Calderón and El Candado contain some very luxurious developments, many with magnificent views of the city and the coast.

The property market in Malaga is not geared to the foreign purchaser. While estate agents on the coast will invariably be bilingual, if not staffed by native English-speakers, offices in the city will usually be able to offer someone who can manage in English. Another notable difference is the persistence of dual pricing, in euros and pesetas. When dealing with property prices and large figures, the locals are happier thinking in millions of pesetas.

Finally, it is important to bear in mind that opting to live in Malaga city is likely to involve a big culture shock. Living in the cosseted urbanisations on the coast, it is easy to think that everything is the same as back in Ireland, except for the climate.

In Malaga city, you will soon discover that everything is different, from shop opening times to the rituals surrounding birth, marriage and death. But then, that's the pleasure and challenge of it.