Tinsa Commercial Director Pedro Soria focused on his speech by attending the Inmoforum forum held at Alicante Archaeological Museum (MARQ) last Wednesday. second home market: “As for the question of whether it is a good time to invest in the residential real estate market in Alicante, the answer is clearly yes.”
– How is the real estate market in Alicante this year? And home mortgage appraisal volume?
The Alicante market has moved quite steadily in recent years and has established itself as a expansion and growth process. Although the second hand is the hand that has attracted the market strongly and has represented an average of about 90% of transactions in recent years, New construction home sales are on the rise since the recovery of the real estate market began. It is also seen how the quality product gains weight in supply and demand, and how the interest in the product for detached houses in the province of Alicante, that is, for a population with a high purchasing power, has increased.
– What kind of future is foreseen in the short and long term?
The housing market in Alicante is very strong, highly dynamic, well-founded and has a good short-term performance forecast. However, in an environment marked by the conflicts in Ukraine, there are uncertainties arising from the current economic situation, the rise in inflation and the rise in interest rates. All this will partially erode current demand. current growth slowdown forecast, this will mainly affect the demand for housing and lower purchasing power. The challenge will be to maintain the dynamism in sales in the foreign market.
It is certain that we will see a definite result in the medium term. demand brake, continues to exist and will recover strongly. And we must not forget that in the face of a wide demand It is necessary to create a sustainable and sustainable supply.
– After the 2020 brake, the offshore market has rebounded, why?
The housing market on the coast of Alicante has clearly reactivated after the end of the mobility restrictions and has recovered its activity levels before the outbreak of the pandemic. And this is a The market that is highly dependent on the foreign market, therefore it mainly focuses on second housing. The market of coastal municipalities has a lot of weight in the province, more than 70% of sales and constitutes approximately 70% of the total visas of the province.
in 2022, average price of coastal municipalities increased by about 2% on average, sales increased by 45% and visas 1%, all in annual data. This shows a scenario of a major recovery in demand with a certain contraction in development activity, which started at very high levels with areas of great dynamism. The coast continues to attract the main developers, with places where construction activities are concentrated, such as Benidorm, Orihuela, Torrevieja, Sant Joan, Jávea or Dénia.
– Have 2019 activity levels recovered?
On an annual basis, The number of transactions recorded in 2019 exceeded. For example, in this first half of the year, registration housing transactions By foreign buyers with approximately 16,000 operations, representing +33% in the first half of 2018, when the highest number of foreign transactions were recorded in the last decade.
Regarding development activity, new building permits in 2021 are currently in place, almost 10% in the province compared to 2019 data, and a slightly lower figure in coastal municipalities, despite growing over 2020. moderate growth.
– Is there much difference between new and second hand house prices?
Despite the overall strength of demand and the consequent rise in prices, Asymmetry continues to be observed between new construction and used housing markets. Shortage of supply and acceleration in demand for new construction have added to bottlenecks in the supply chain, while lack of labor and rising material costs due to war will drive price increases, pushing out some of the demand. for the purchase of used housing.
current economic situation and A rise in interest rates will erode some of that demand, It will have a greater impact on the used housing segment, where prices are expected to adjust or continue to rise much more moderately and will make a greater difference with new construction prices.
– How does this affect the consumer?
The rapid recovery in demand and the current situation of the residential real estate market, where the supply does not catch up, put pressure on the market and cause prices to rise. economic context, inflation is very high and increase in interest rates, It will partially affect the current demand, cause an increase in the effort rate of families, will not have access capacity, will drive some of this demand out of the demand for housing purchases, and will affect a reduction in the usual housing purchase market.
However, this may adversely result in an increase in the investment market to allocate to the housing purchase and rental market or tourist housing. predictable adjustment or slowdown in price increases.
– Can we say it’s time to buy a house in Alicante?
Buying a home is a very important decision and the answer always depends on the specific situation of the buyers, this is a very personal matter. In every situation, It is necessary to analyze both the micro market Like the product before you decide. On the one hand, we have the long-term rental or vacation rental investment market in all its forms.
On the other side is the housing market, where a first or second home is sought. although financing conditions will worsen With the rate hike, we can say that it is a good time as demand is still active and there is no feeling that prices will decrease in the short term.
If the decision is to buy a newly manufactured product, the market is much smaller in volume than the second-hand market and the purchase quantity is higher, and in this case the forecast is a future price increase as it is very low. offer.
In any case, if the question is A good time to invest in the residential real estate market in Alicante, The answer would obviously be “yes”. For the investment market, housing offers good opportunities as a haven asset, with a rental market highlighted by the surge in demand. On the other hand, the normalization of movements has reopened the doors of tourism. new move in vacation rental.