slowdown in real estate market is already affecting international demand and the number of second homes in the Alicante province. More than half of total transactions involve buyers from outside the country. If last year’s initial rate increases didn’t significantly affect a customer base that often does not require financing, the erosion of purchasing power has weighed on European middle classes and the economy. In the third quarter, buyers on the Costa Blanca reduced property purchases by 14.3%.
Data collected by Valencia Notary College shows a wave of listings in the province from July to September, consolidating the trend across the community. 6,817 homes were owned by non-residents, down 1,140 from the same period in 2022, a drop that aligns with the 14.3% decrease. Through the first nine months of the year, 22,588 transactions were recorded, a decline of just 5.65% thanks to solid results at the beginning of the year.
An apartment on the beach is 55% more expensive than a normal apartment in Alicante
Although the regional situation remains more resilient than the national market, the contraction in the third quarter reached 17.2% and 13.6% for the year to date. This is particularly worrying given that residential tourism is one of the main engines of Alicante’s economy, directly influencing real estate activity and consumer spending during property stays.
In this context, the decline in transactions through September shows a 345 million euro drop, compared with the same period last year, when foreigners invested 4 billion 334 million euros in total sales and purchases; this year the figure stands at 3 billion 989 million euros.
The deputy dean of the Notary College notes that inflation and worsening European economic conditions have dampened the continent’s purchasing power and, above all, encouraged prudence among middle-class buyers. There is less enthusiasm for big purchases, a trend captured by the regional notaries.
Countries
Nationality data highlights how uncertainty shapes demand. The United Kingdom remains a leading international client in the region, with 964 homes bought in the third quarter and 2,985 year to date, reflecting declines of 21.1% and 17% respectively.
House sales in Alicante fell for the second month in a row, confirming the change in trend
The drop extends beyond borders. Germans bought 26% fewer homes in the last quarter, French demand fell by 27.6%, while Swedish activity also tumbled by 37.2% from the prior summer, placing Sweden as the fourth market in line after a long run as a top buyer.
Belgians remained resilient, purchasing 700 properties in the province during the third quarter with only a slight decrease year over year, totaling 2,374 transactions for the year and still showing a positive trend of 7.7%. Dutch buyers also posted declines, yet remained among the few markets delivering positive results. Russians and Ukrainians faced a downturn tied to migration pressures from regional conflict.
In the first nine months, Belgians bought 1,022 homes in the area, a 38.8% rise, while Ukrainian buyers added 1,046 transactions through September with a 47% increase. By the third quarter, growth had moderated to about 8.3%.
The real estate hold-up has already cost Alicante more than $200 million
Industry groups note that the market is adjusting to a more normal pace when compared with the most active period in history. They emphasize there is no major alarm among businesspeople, and the slowdown could even be healthy for companies that faced stock shortages from intense sales periods.
Banks began to loosen loan restrictions again. Financial observers expect a partial recovery in the national market during the latter half of the year as lenders resume mortgage lending. Banks are balancing reduced loan balances on their books with rising customer repayments, and many buyers may opt for hybrid mortgage options to mitigate higher interest costs.