This inflation-driven erosion of purchasing power and a cooling economy across Europe have left Alicante’s real estate market with a dent in international trade. Yet the market remains afloat thanks to continued activity from buyers outside Spain. A segment that already showed strong momentum after the Ukraine conflict began and stayed dynamic into early 2023, according to data from the Notaries Union of the Valencia region.
In the first quarter, foreign buyers accounted for a total of 7,499 homes in Alicante province, up 4.2% from the same period in 2022. While this growth is modest compared with the roughly 47% surge seen in the Costa Blanca’s international market over the past year, it remains a positive signal. Spaniards bought 6,334 homes in the same timeframe, down 7.3% year over year.
Two distinct trends emerge within the international segment. On one hand, demand from traditional Western European markets softened as higher living costs and rising interest rates weighed on purchases by residents who historically account for a large share of activity in the province. On the other hand, buyers from regions nearer to Ukraine showed resilience or even increased interest as they sought shelter amid ongoing uncertainty.
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In this context, English buyers remain the largest group among foreigners purchasing property in the province, though activity fell. The number of transactions dropped 17% from 1,116 in the first quarter of 2022 to 924 in the first three months of this year. German buyers accounted for 537 transactions; French purchases declined 18.8% to 378; and Dutch buyers fell 6.6% to 633.
Nevertheless, the most pronounced decline occurred among Swedish buyers, who fell nearly 43% from 582 homes purchased in January–March 2022 to 337 in the same period of 2023. The Scandinavian nation, not part of the eurozone, faced higher rates and tighter monetary conditions that weighed on demand.
The only notable exception within Western Europe was Belgium, where purchases rose 22.9% to 842 homes sold in a single quarter.
Eastern European buyers, especially those from Poland, remained among the most active newcomers. Azorrection in Alicante’s market has also benefited this group, which expanded to 526 homes in the first quarter, up 28% and ranking as the fifth-largest nationality. In some towns, they even surpassed Swedes, reshaping local rankings in places like Torrevieja.
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As expected, the pool of buyers widened further. Ukrainians rose 58% to 363 transactions, though most displaced Ukrainians prefer renting rather than buying, according to Pedro Menarguezin, managing director of Marsol Internacional.
Russian buyers also increased activity, with 394 purchases, up 40% in the first quarter. The recovery extended to smaller markets as well, with Lithuanians (138 transactions), Latvians (31), Estonians (25), and even Moldovans (12) contributing to the overall rebound.
Drop
Looking ahead, the Valencian Notary College notes that the second quarter is likely to show a further trend of cooling, with forecasts pointing to a global transaction decline of more than 20%. As the deputy dean, Dolphin Martinez, observes, inflation and negative sentiment across Europe have encouraged buyers to pause and reassess, even as some segments stay active.
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Notaries highlight another key trend: the average sale price for foreign buyers has dipped from 171,487 euros to 165,431 euros, signaling tighter budgets and greater price sensitivity among international clients.
Similarly, the Provia secretary, Jesus Ros, notes a normalization phase after years of rapid growth. He expects demand to hold steady for new construction, which remains a small share of the market at roughly 15%, and points out that inventory remains low.
Dutch buyers still pay the highest average prices, at 255,086 euros per transaction in the first quarter. They are followed by a small number of Swiss buyers at 227,428 euros, Chinese buyers at 224,114 euros, Norwegians at 211,086 euros, and Belgians at 206,999 euros. Germans and British buyers come next, with averages of 181,693 and 177,262 euros, respectively. Moroccans, meanwhile, invest the least on average, at about 44,620 euros per property.