Across Alicante, used housing values kicked off the year amid a momentum of price growth. A tight supply, rising borrowing costs, and solid foreign demand combined to push annual prices up by 15.4%, placing the province fourth in the nation for price levels at 1,817 euros per square meter. It marks the sharpest rise since the housing crisis began.
Second-hand property prices in Alicante have climbed even more steeply, following the surge in new homes which increased by 14% over the year. This trend is highlighted in Fotocasa’s February report, one of Spain’s leading real estate portals. Nationally, Spain saw an average rise of 9.9% year over year, with the typical increase equating to 2,086 euros per square meter; Alicante’s increase outpaced this average by five and a half percentage points.
Only three regions posted larger gains. The Balearic Islands led with a 20.2% rise to 3,466 euros per square meter, followed by Santa Cruz de Tenerife at 19.1% and 2,150 euros, and Navarra at 17.5% and 1,914 euros. The smallest increases appeared in Albacete at 1.6% (1,355 euros), Ciudad Real at 1.5% (974 euros), and Asturias at 1.2% (1,602 euros). Alicante also ranks twelfth among the most expensive regions, trailing the Balearic Islands and major Basque, Madrid, and Canary Islands markets.
The price surge in Alicante outpaced the Community of Valencia average, which rose 11.1%, bringing the regional average to 1,608 euros per square meter. Castellón recorded 7.1% growth at 1,203 euros, while Valencia saw a 6.9% increase to 1,532 euros per square meter.
Among municipalities, the biggest climbs in the province and within Valencia Community were Pilar de la Horadada at 59.4%, El Verger at 47%, Rojales at 46.4%, and Finestrat at 41.7%. Pedreguer followed with a 39% rise, and Calp at 36.4%. In regional pricing, Calp remains the most expensive spot at 3,293 euros per square meter, with l’Alfàs del Pi close behind at 3,021.
Within the capital cities of the Community, Alicante saw the largest jump, reaching 2,012 euros per square meter and an 18.3% rise. Castellón climbed 7.9% to 1,320 euros, and Valencia edged up 0.9% to 2,354 euros.
Acceleration
Fotocasa’s studies director, María Matos, notes that these increases represent the strongest acceleration in 17 years. She emphasizes that the rise echoes the levels seen around 2006 in the period just before the housing bubble peaked. The report attributes the growth to higher ECB interest rates, which have increased loan costs, while persistent demand for second-hand homes remains a key driver amid limited supply.
Industry observers, including Fotocasa, suggest the growth may be temporary and anticipate a moderation as mortgage rates continue to influence affordability. The Euribor situation is expected to weigh on activity in the second-hand market as well.
How much do house prices have to drop to compensate for the mortgage increase?
Marifé Esteso, president of the Alicante Association of Realtors, concurs that tight supply sustains higher prices. She notes that while price levels vary by municipality, the overall market remains undersupplied, supporting elevated values.
Pedro Casamayor, a local real estate professional, points to robust demand from foreign buyers as a major factor. He attributes part of the current momentum to geopolitical tensions, including the war in Europe, which has increased interest from Ukrainians and other Eastern markets, affecting both existing homes and new builds.
Foreclosures edged down by 15% in 2022.
INE data show a 15% decline in home foreclosures in Alicante, dropping to 1,414 in 2022. This follows a pandemic-era moratorium and a previous peak, with rustic farm foreclosures rising 7% to 178 that year.