Alicante housing market shows a split between new builds and second-hand homes
The housing market crash of 2008 hit hard, wiping out a large portion of real estate activity. It created two distant markets: new construction and existing homes. When both segments moved in parallel, price gaps in the Valencian Community hovered around 20 percent. Today, used homes account for roughly 90 percent of transactions while new houses remain a luxury item, costing well over 70 percent more on average.
These patterns come from the Immocojuncture 2023 Alicante appraisal which analyzes the dual evolution of the market in recent years. This dynamic is echoed across the country, with particular intensity in regions such as Valencia.
Before the bubble burst in 2007, new builds and second-hand homes shared the market nearly equally in terms of autonomy, with 61,884 transactions for new construction and 63,889 for the resale market. The crisis sharply reduced new construction, restricting the supply of fresh homes.
An apartment tower under construction in Benidorm is among the visual references for the period of expansion.
In this context, the Alicante College of Quantity Surveyors and Builders reported that annual new-home completions exceeded 50,000 in previous years, but by 2012 activity collapsed to just 1,329 properties. Recovery began around 2014, yet even in 2019, a year noted as strong for the market, only 7,532 new homes were launched, a tiny fraction of prior levels.
According to the Euroval report, new construction now represents only about 10 percent of the market. In Valencia’s autonomous community, last year saw 10,134 new residences versus 103,118 transactions for second-hand properties, indicating a market that grew but remains heavily weighted toward existing homes.
Housing prices in Alicante defy rate hikes and continue to rise
The gap between the two market segments is clear in price data. New housing has always commanded higher prices, but the gap was less pronounced before the crisis. In 2007, the price difference was about 18 percent with average values of 176,425 euros for new apartments and 149,056 euros for second-hand homes.
Today, the difference has widened to roughly 71 percent. The average price of a new home in the Valencia region has climbed to about 225,316 euros, up 27.7 percent from the period before the bust. Meanwhile, average prices for second-hand apartments sit around 131,818 euros, about 11.6 percent below their pre-crisis level. The 2007 comparison marks the starting point for this analysis.
Technical requirements and market quality
The cost of new housing did fall with the recession, but not as sharply as the existing-home market, and signs of recovery began strongly around 2016. The decline in the resale market was sharper and prices stayed flat longer, widening disparities between the two sectors. Euroval’s report points to a short supply and a growing divergence that reflects the market’s evolving needs. The new housing stock now tends to be of higher quality and different in character from homes built two decades ago.
A building under construction in Alicante illustrates the ongoing development. The typology has shifted, with much of the second-home market on the coast attracting foreign buyers with stronger purchasing power. Even promotions intended as primary residences now include urbanization with pools, more affordable apartment blocks, and the virtual disappearance of middle-class VPO offerings.
The influx of buyers from the East affects Alicante’s market amid changing standards
Industry leaders highlight that rising technical requirements across the board, including environmental and waste-management standards, have driven up construction budgets. These higher standards pose challenges but are now part of the normal cost structure for new developments.
For context, average construction costs in Alicante have risen from about 361 euros per square meter in 2007 to roughly 592 euros per square meter in the first quarter of this year, reflecting the price pressures and quality demands shaping the market.
Ultimately, the market in Alicante exhibits a clear shift: new builds are less dominant but are increasingly tied to quality upgrades, sustainability, and market segmentation while second-hand homes continue to drive most transactions in an otherwise evolving landscape.
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