Looking for a house in Alicante? This is the portion of income typically allotted to mortgage or rent
Alicante continues to stand out as a promising option for real estate investors, despite higher purchase prices. When the goal is rental profitability, annual returns in the province can exceed what traditional bank deposits or state treasury instruments offer, making rental assets appealing as a source of steady income.
Recent data on housing profitability in Spain for 2023 shows that buyers who rent their properties in Alicante can generate annual returns around 6.5 percent of the invested amount. Although this is about one tenth lower than the previous year, it reflects a shift where property prices rose more quickly than rents. Specifically, prices climbed around 13.2 percent while rents increased about 11.6 percent. Still, Alicante’s overall profitability remains slightly above the national average of roughly 6.4 percent.
The profitability map across Spain and Alicante’s standing
In Valencia, the figure stands at about 9.5 percent, followed by Toledo at 8.6 percent, Huelva at 8.2 percent, and Segovia at 8.1 percent. Conversely, Malaga reports around 5.1 percent, the Balearic Islands about 5.3 percent, and Madrid provinces showing more modest profitability at roughly 5.5 percent. The high housing prices in some areas tend to compress returns, making investment less attractive despite strong rental demand.
Municipal differences within Alicante
The Alicante province shows notable variation between municipalities. The most profitable towns do not always have the highest rents; instead, they offer a favorable balance between rental income and the initial investment required. Among the ten towns examined in the Fotocasa study, Alcoy leads with an annual return of 7.6 percent.
In second place, San Vicente del Raspeig reports about 6.8 percent, followed by Elche at 6.7 percent, then Alicante city at 6.6 percent, and Santa Pola at 6.4 percent. Benidorm presents around 6.3 percent, El Campello about 5.9 percent, and Torrevieja roughly 5.6 percent. The lowest profitability appears in Denia at 4.8 percent, Altea at 4.7 percent, and Orihuela at 4.5 percent.
The study notes that these figures compare housing investments rather than seasonal or tourist rental models. Coastal towns often rank differently when tourist-driven rentals are included, which can significantly affect profitability in those areas.
Is a luxury property in Alicante worth it for rental investors?
Even after accounting for higher purchase prices, investing in rental housing in the surveyed Alicante populations remains more profitable than many other options, especially for conservative investors. Eurostat data underscores this contrast: average bank interest on term deposits sits low, around 2.62 percent, while rental income in the province typically exceeds this by a healthy margin. The latest market movements show rental yields outpacing traditional savings returns, making rental property a robust option for generating income in the region.
Notes from the broader market indicate that while the Alicante rental market can outperform banks in terms of yield, markets can vary by municipality and by whether the investment prioritizes long-term stability or short-term tourist activity. Investors should consider local demand, price trends, and the balance between upfront costs and ongoing maintenance when evaluating opportunities in this coastal province.
All figures are indicative estimates drawn from the Fotocasa study and related market analyses conducted for the year 2023. They reflect long-term rental profitability without factoring in seasonal variations or tourist-focused rent models. Analysts caution that coastal municipalities may shift in attractiveness when tourist rental demand is prominent, which can alter the ranking of potential investments.