Even as sales are expected to keep rising, the question looms: how many houses will Alicante offer in the coming quarters? Will demand from second homes balance the slowdown among traditional buyers caused by higher rates? Opinions vary, yet the market appears to have hit a ceiling after a strong post pandemic surge in the province.
These questions hover over Alicante’s real estate sector. With Euribor rising and inflation eroding purchasing power across Europe, the market that finished last year with remarkable numbers is under pressure. The consensus is that a turning point is near, if it has not already begun.
New data published by the Registro de la Propiedad illustrate the current mood. In the province, between January and March, there were 12,979 property transactions, the best start to a year since 2007. In the same period, 15,586 homes were sold.
However, the first quarter figure, even with an almost 38 percent year-on-year increase from the previous year, shows only a 7.7 percent improvement over the first quarter of 2022. In other words, activity is cooling and is likely approaching the peak of the current cycle. At the national level, transactions have already contracted, with 161,024 sales, down 2 percent year over year.
Marife Esteso, president of the Alicante College of Real Estate Agents API, notes that Property Records data can lag slightly because there is often a delay between the sale finalization and its registration. Street-level observations already indicate some moderation in the number of transactions.
Despite rising housing loans, Alicante continues to see higher levels
Interestingly, Esteso highlights not the rate hikes alone but the tightening of supply as a major factor damping the figures. Many properties sold last year are not readily available now, making it harder to find what buyers want. This shortage could ease in the coming months if owners who rented their properties decide to put them on the market after the new Housing Law was approved.
Nevertheless, Esteso does not foresee a sudden collapse. A large portion of the market relies on foreign buyers who typically pay cash, so currency fluctuations have less impact on their purchases.
In the larger picture, Alicante remains one of the most active real estate markets in the country. The first quarter rankings show Madrid with 22,356 sales and Barcelona with 16,423 transactions. Behind them, Malaga records 10,884, followed by Valencia with 9,447 and Seville with 6,140.
As has been the trend in recent years, second-hand homes constitute the vast majority of transactions, tallying 11,176 deals and accounting for 86 percent of the total. New construction transactions reach 1,803.
Recent data also show a higher share of foreign buyers in Alicante, at 43.76 percent, followed by other regions. This pattern aligns with a steady appetite from international buyers that helps stabilize the market even as domestic conditions fluctuate.
Lack of stock drives construction of new homes in Alicante in Q1
The province registers a high share of foreign buyers compared with other regions, with a notable ratio that remains well above national averages. This dynamic contributes to a market that remains active despite slower domestic demand and rising financing costs.
Mortgage
Mortgage data from the registries show a cautious trend. The Valencia Community reports an average mortgage value of 106,869 euros, reflecting a slight decline of about 0.2 percent. The national picture shows a larger drop of around 4.1 percent. In practical terms, buyers are seeking to reduce monthly payments in light of higher Euribor, influencing demand patterns.