In general, Madrid, Barcelona, Valencia, Seville, Zaragoza, Malaga… are cities that lead the large real estate markets in the country, but new cities have entered the scene. This is the case of Alicante, where residential activity has intensified. Far from being moderated by the rise in interest rates, the strength of foreign demand has caused the price of the square meter to rise at its highest rate, at least since the bursting of the housing bubble, 15 years ago.
Property prices in Alicante city in 2023
Alicante is the second city that experienced the greatest increase in the price of housing for sale, only behind Santa Cruz de Tenerife. According to data collected from Fotocasa at the end of January, the square meter was paid at 1,965 euros, which represents a year-on-year increase of almost 17%. Even so, the price is 14.6% below the maximum reached in the city in July 2006 (€2,300/m²) and 4.7% below the national average (€2,062/m²).
Property prices in municipalities of Alicante in 2023
In the analysis by municipalities, the increases registered by many towns in Vega Baja, small in size but with a considerable boost among foreigners and where a large part of its residents come from other countries, stand out.
This is the case of Algorfa, where prices rise by 41%; Formentera del Segura, with 38.8%; Dolores, with 38.7%; or Benijófar, with more than 31%; according to data collected from Idealista.
But the increases are also significant in the large markets of the province. In the city of Alicante, the square meter has risen by 14%; in Torrevieja, 16.1%; and in Orihuela it reached 18.5% year-on-year growth.
In La Vila Joiosa, houses are 21.1% more expensive than in January 2022; in Calpe, 20%; and in Denia, 16.6%. However, in the case of Elche the evolution is somewhat more moderate and even so, the difference with respect to a year ago is 8.1%, above general inflation.
On the contrary, prices recorded decreases in towns such as Monóvar (-1.6%); Elda (-1.6%); Crevillente (-3.6%); Aspe (-4%); Cocentaina (-5.5%) or Muro de Alcoy (-6%), according to data from Idealista.
The interest of foreign demand is due to the Mediterranean climate, the sea, the price of housing below the average for Spain and more affordable than in their countries of origin, among other attractions.
In addition, according to the search data by foreigners from Fotocasa, Alicante is on the third step of the podium of the majority of nationalities looking for a home in Spain. In fact, in the Valencian Community 21% of purchases are made by foreigners.
The reason for this increase is due to the growing foreign demand, which are profiles with high purchasing power and who do not usually need financing and, therefore, are oblivious to increases in the Euribor and changes in the ECB.
