The national interest in housing purchases continues to grow, while the profile of buyers on coastal markets is shifting in ways that reflect broader economic and international currents. Since Brexit, buyers from the United Kingdom and other European countries have adjusted their patterns, with recovery evident in France, Germany, and Central Europe. There is a noticeable tilt toward higher market segments as buyers bring financing power and different purchase strategies to coastal towns.
Prices have been rising, and the purchasing power of second home buyers remains above average. With the strength of cash resources, these buyers are less exposed to inflation and higher interest rates because they can complete acquisitions using their own funds. This dynamic supports sustained demand for coastal holiday properties even as other segments face tighter borrowing conditions.
The coastal municipal market shows clear concentration, with a majority of transactions occurring in a relatively small set of municipalities. The typical price for holiday homes is higher and continues to climb, driven by a growing gap between coastal municipality pricing and the broader provincial average.
Prices within Alicante’s coastal municipalities run close to the averages observed along the Mediterranean and Atlantic coasts, yet they remain below the benchmarks of major coastal hubs such as Valencia, Málaga, and Cádiz. This positioning reflects both demand patterns and the distinctive supply landscape of the region.
The average price of holiday homes remains higher and on an upward trajectory
The latest data indicate that the average price for both new and existing homes in the city of Alicante sits at €1,546 per square meter, marking a 5.1 percent year over year rise. The province as a whole reports a stronger 6.4 percent increase. A commonly cited price level is around €1,404 per square meter, underscoring the premium attached to coastal living. High demand is notably supported by non resident buyers along with a persistent supply shortage that continues to push prices upward across the market.
Real estate remains a safe haven for many investors in inflationary contexts. Savers and buyers who require little to no financing increasingly favor holiday homes that offer attractive yields, especially where product scarcity and high demand reinforce price momentum. This tendency translates into a tighter market where available stock, particularly traditional rental housing, often remains limited for local demand.
The supply side shows a direct impact from these conditions, with constrained new construction and persistent pressure on the second hand market. A lower volume of new builds continues to push buyers toward existing properties, reinforcing price gaps between new and used homes and elevating overall market tension.
We continue to observe an asymmetry between the new construction and the used housing markets
Shifts in the macroeconomic environment and rising interest rates are cooling some demand, especially in the second hand segment where prices are expected to stabilise and then trend modestly downward. This creates a growing imbalance as buyers weigh affordability against long term value. The broader real estate market shows a general slowdown in activity after a period of rapid growth, with foreign buyers still present but at a lower rate relative to the peak years. Alicante, in particular, remains a focal point for international transactions, a positive signal in a challenging macro environment.
The trend appears to favor price stability rather than a pronounced correction. If the forecast holds, financing conditions may tighten further, making mortgages more costly or at least more carefully structured in the coming months. For buyers, the decision to purchase hinges on personal circumstances and the ability to meet monthly obligations, but selecting a well-suited property with solid long term prospects may still present a favorable opportunity in the medium term.