Market rent in the Alicante province still shows signs of overheating, yet the regional government and the real estate sector disagree on the remedies. The Valencian government welcomed Pedro Sánchez’s pledge to mobilize up to 50,000 Sareb homes for social rental and affirmed that it will enact a new law to cap rent growth. Promoters and developers warned that price caps could scare homeowners and shrink supply further, potentially worsening the problem.
Recent data reveal growing difficulties in finding suitable housing. The Idealista portal reports a 9 percent drop in rental listings nationwide, with Alicante City bearing a heavier burden at 19 percent. The province also faces the lowest rental stock since 2017, a trend repeated for a second year in a row.
Exceptional demand, amplified by the post-pandemic lull that kept many owners from putting homes on the market out of fear of eviction rules for tenants in hardship, has intensified the squeeze on available housing.
Existing flat stock in Alicante decreased by 9 percent
Fotocasa notes that rent levels rose to an average of 9.97 euros per square meter, marking a 21.6 percent increase across the province last year. A typical two-bedroom apartment of around 80 square meters could cost roughly 798 euros more per month than before, a figure many families find untenable. Still, there is a glimmer of relief in the data: the pace of increases cooled, with the first quarter showing a modest 1.5 percent rise.
Facing housing access challenges for many groups, the council’s second vice president and regional housing head voiced satisfaction with the central government’s housing agreement with investors. He highlighted two main points: a reduction in the affordability threshold from 10 to 5 digits, which would enable broader measures against landlords who refuse to rent, and the proposal to establish a new rent index independent of CPI, with a 3 percent cap in the coming year, plus price limits within areas deemed under stress. Procedures to implement these changes across the Valencian Community are set to begin the day after approval, he asserted.
The Housing Act will limit rent growth to 3% in 2024 and then set an index to cap the increase annually.
In this context, regional leaders noted that 83 municipalities have already been identified as having high housing needs, with plans to update this list as criteria for stress areas evolve. Ximo Puig, who serves as both president of the Generalitat and Illueca, commented on Pedro Sánchez’s pledge to mobilize 50,000 Sareb homes for social rental. He and Illueca expressed some regret that earlier proposals from Podemos were not adopted sooner, but remained hopeful about the current measures.
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Developers and real estate agents present a different perspective. The law, they say, may drive more owners to withdraw properties from the rental market if certainty is lacking and if rent caps limit potential returns. Marife Esteso, president of the Alicante College of Realtors, warned that the policy could worsen conditions and questioned the efficacy of Sareb’s portfolio mobilization, asking where these homes will be located and under what terms.
The Provia representatives argued similarly that Sareb’s social rentals are unlikely to move the overall market or reduce prices. They advocate for increased public housing budgets, broader tax incentives, and targeted direct aid, echoing support for expanding public housing stock through affordable housing programs with a track record of creating more units, rather than relying solely on private market adjustments. They also noted that the 1990s era VPO policies produced far fewer units than needed, with only a small fraction built last year.
Looking ahead, officials anticipate that the forthcoming territorial regulation will raise prices for VPO homes, enabling more marketing campaigns and new builds. The proposed reform would lift the maximum price for VPO homes in many municipalities, with estimates suggesting a rise from 85,000 euros to as much as 154,000 euros in some areas, a move expected to spur investor interest.
Francisco Inareta, spokesperson for Idealista, criticized the housing law as another instance of coercive policies that fail to address the core issue: a chronic shortage of supply. He noted that all measures so far have simply constrained available stock and worsened access for those most in need, highlighting the 2 percent update cap on rents as an early policy that has begun to distort the market by limiting new housing options for new tenants.