generation change
The Costa Blanca real estate scene has felt the squeeze from higher borrowing costs and a dip in family purchasing power. This coastal market, a cornerstone of the sector, has seen Madrid residents—who have long dominated the second home segment—adjust their behavior. Although they remain a sizable group, their activity has softened, underscoring how a large provincial inventory hosts many coastal towns and the city of Alicante, especially in central San Juan and along the coast, where second homes have historically powered regional growth.
Data from the Ministry of Transport and Urban Agenda shows a clear shift. From January through September of the previous year, buyers from other provinces purchased 4,799 homes along the entire border, marking a 17.8% drop from the prior year. This decline outpaced the overall market, which fell 7.8%, and coincided with a substantial drop in purchases by foreign buyers, part of a broader pullback in key international clientele for the region.
Unlike foreign buyers, who predominantly transact in cash, national second home buyers have leaned more on financing and often face tighter purchasing power. The association representing local realtors notes that rising credit costs are squeezing this segment, a point echoed by Nora Garcia, president of the Valencian Community Realtors Association.
Madrid has historically been the largest source of Costa Blanca purchases due to easy access and strong ties to the area. Yet the current period has delivered some of the sharpest declines, with a roughly 25% drop reported. Between January and September, 2,723 homes were bought in the region by residents of Madrid, compared with 2,057 in the previous year across the same span.
generation change
Juan Carlos Sempere, manager of Abaco Servicios Inmobiliarios in Alicante, notes deeper structural issues behind the slowdown. Beyond the immediate market conditions, a shift in generations is changing demand. Many younger buyers prefer renting while saving to buy later, and rising Madrid housing costs plus longer mortgage terms are constraining access to a second coastal home, according to the expert.
In Alicante, the price gap remains a hurdle for many potential buyers. A coastal apartment can cost up to 55 percent more than a similar property inland, highlighting the premium tied to location and lifestyle along the beachfronts of the region.
Nonetheless, Madrid is not the only source of cooling demand. Valencians, the second-largest buying group who focus on Marina Alta, purchased 19% fewer homes last year, for a total of 750. Castilian-Manchegans purchased 365 flats, a decline exceeding 20%. Basque buyers, once a major force in Benidorm, saw a 24% drop with 176 transactions. Catalans remained relatively resilient, with 231 purchases in the province, a mere 1.2% decrease from the prior year’s level.
As for housing type, locals typically favor apartments and residential complexes, while foreign buyers lean toward detached houses. Price increases over recent years have curbed some demand from local buyers, especially when compared with the higher purchasing power seen among expatriates.
The real estate engine in the region faced a broad slowdown: transactions in Torrevieja, Alicante, and Orihuela declined. The salt city remains the largest local market with 5,532 transactions from January through September, down 6% year over year. The provincial capital followed with 5,058 transactions and a 13.3% annual decrease. Orihuela posted an 8.4% drop, totaling 3,641 sales.
Other municipalities saw more pronounced declines. Santa Pola registered 1,447 operations, down 19.5%; El Campello 661 transactions, down 20.6%; and San Vicente del Raspeig 503 transactions, down 31.4%. Elche managed to limit losses to 2.6% with 2,631 transactions, while Benidorm, Calp, and La Vila saw mixed results, with Benidorm up 0.8%, Calp up 2.8%, and La Vila up 9.3% in the period.
In a broader view, Catalan buyers showed resilience with 231 purchases in the province, matching the prior year with a minimal decline. Data indicate that locals generally prefer serviced apartments and attached residential options, whereas many foreign buyers continue to favor detached homes. A market observer noted that the recent price rises act as a brake for such buyers, especially when contrasted with the stronger purchasing power seen among expatriates.
The driving force of the local market experienced a pause: sales in key towns like Torrevieja, Alicante, and Orihuela slowed down as part of a province-wide trend. The Costa Blanca’s largest hubs show divergent stories: while some towns still post gains, others face sharper downturns, painting a nuanced picture of a market navigating higher borrowing costs, shifting generational tastes, and regional price dynamics.
At the same time, the Costa Blanca’s appeal remains for many buyers seeking coastal living, with its mix of accessibility, lifestyle, and investment potential continuing to attract attention despite recent declines. Analysts suggest that alignment between mortgage conditions, family finances, and long-term planning will shape the next phase for buyers from Madrid, Valencia, and beyond.