The housing market in the Alicante province shows a strong rebound, with sales climbing after a recent lull. After a slowdown driven by concerns about the war in Ukraine and higher interest rates, local developers appear to have moved past the doubts. Data released by the Official College of Quantitative Surveyors, Technical Architects and Civil Engineers of Alicante confirms that new home activity picked up again in early 2017, signaling renewed confidence in the market.
The latest figures indicate a 22% rise compared with the last quarter of 2022 and a 52% increase from the start of the previous year. The expert head, Carlos Casas, notes that this trend suggests confidence is returning, with the belief that the most pessimistic forecasts from a year ago did not materialize. He adds that while war and inflation may slow the recovery, they have not halted it outright.
Looking at the first part of the year since the pandemic began, Casas observes that current activity remains below the peak seen in the first quarter of 2019, when 2,318 new homes were placed into operation. Still, there is room for growth, according to Casas, who sees prospects for continued expansion.
Municipalities
Municipal data show a notable increase in activity in Orihuela, with a rise well above the same period last year when 525 new homes began in the first quarter. The trend is striking in Benidorm, which started development on 288 residences; San Juan reported 170; Torrevieja 118, all according to the same sources. The takeaway is that the surge in buyer interest post‑war has spurred a broader wave of projects, according to Jesus Rosthis, the general secretary of Provia, who argues that these figures could be higher if costs and uncertainty did not constrain the sector.
In this climate, builders themselves are participating in the new promotions, with a 12% rise in construction costs based on the average price from last year. Current estimates place the cost at about 592 euros per square meter.
Inflation and licensing delays slow the growth of residential construction in Alicante
Jesualdo Ros notes that most new developments are clustered along tourism-oriented municipalities where foreign buyers have been a substantial portion of demand. Many purchasers do not require traditional financing, which makes them somewhat less sensitive to rising interest rates.
Valencian Community Notaries data show about 60,000 house sales in Alicante last year, with foreign buyers playing a leading role up to now. Foreign buyers accounted for 52% of transactions and more than 47% increase over 2021. The rate of foreign ownership is even higher in newly built homes, with 4,952 new properties notarized in Alicante and 55% of those buyers coming from abroad. Yet, despite the strong sales, the number of new starts rose only marginally last year, reflecting cautious sentiment among developers amid ongoing uncertainty and price control concerns. In total, 5,768 homes began construction, just 2.7% higher than the previous year.
Home sales in Alicante don’t stop and set the best record since 2007
As prices stabilize and products remain scarce, developers have reactivated the pace of construction. This trend aligns with the latest Active Population Survey, which shows job growth in the sector with about 9,400 new roles created in three months. However, growth is not uniform across the province. In the Alicante metropolitan area, activity has waned compared with recent years, with only 85 homes launched in the first quarter, a drop of 74% year over year. El Campello and San Vicente show smaller declines of about 27% and 8% respectively, while San Juan stands out due to the Nou Nazaret development area. Elche reports 39 new homes, an 8.3% year‑on‑year rise.