The sharp rise in mortgage costs has not cut the pace of loans. In Alicante, demand remains strong and the market shows acceleration in the first quarter of the year. This pattern is echoed by major real estate portals which report double digit increases in price per square meter year over year.
Experts attribute the trend to several factors, including reduced housing supply and a high volume of cash transactions or loans with minimal financing. Regardless of the causes, the message is clear: demand remains robust.
Although figures vary slightly by source, the overall trajectory is consistent across studies from different portals. Adevinta’s portal notes a 1.6 percent rise in the province during the last quarter, bringing the annual gain to 15.2 percent for residential properties in the region, the fourth largest increase in Spain over the past twelve months.
Idealista reports a 3.1 percent rise in prices during the first three months, amounting to an 11 percent annual increase and pushing the average to around 1,908 euros per square meter.
This acceleration is notable compared with the 6.5 percent annual gain Idealista calculated in March of the previous year, and it surpasses the 10.1 percent gain recorded for the entire year. It is also the highest figure in the portal’s historical series dating back to 2007.
According to Idealista, high mortgage rates and financing costs have not dampened demand. Francisco Inareta, a spokesperson for Idealista, notes that many buyers cite the possibility of making a smaller loan as a reason to proceed with a purchase itself. The effect has been sustained by buyers who can save more quickly, reducing the amount they need to borrow.
Foreign buyers push up Alicante prices
Foreign buyers represent a notable share of activity in Alicante, often purchasing with cash and without mortgage funding.
Inareta also points out that competition among banks has tempered the rise in mortgage rates. He notes that the current stock of housing remains tight after many transactions in recent years, which supports prices.
Observers will have to wait to see how long this momentum lasts. Maria Matos, director of studies at Fotocasa, describes the sizable increases as temporary and suggests a moderation in prices may appear eventually, depending on how Euribor influenced financing evolves.
Municipal price changes
Idealista’s municipal analysis highlights notable gains in several towns over the past year. Benijófar tops the list with a 26.7 percent increase, followed by Sant Joan with 23.4 percent, Altea 17.9 percent, Pedreguer 16.6 percent, Denia and Catral both around 15.9 percent, Alicante 15.6 percent, Benissa 15.1 percent, and Verger 14.2 percent.
Among larger populations, Torrevieja shows an 11.9 percent rise, rising to 18.2 percent in La Mata, while Orihuela records 11.8 percent. Elche posts about 8.9 percent and Benidorm 7.3 percent.
Even with broad price growth, areas inland with little tourism show early signs of cooling. Municipalities such as Aspe, Elda, Xixona, Monovar, Petrer, Sax and Villena are already reporting price declines on a year over year basis.