Housing Market Trends in Alicante: A Dual Path Between New Builds and Second‑Hand Homes
The real estate crash of 2008 did not merely wipe out a large slice of the market. It reshaped how new construction and existing homes interact, creating two increasingly distinct markets that still share a common landscape in the Valencian Community. Today, second‑hand homes account for the vast majority of sales, while new builds have become a luxury segment with prices that sit well above the average. The gap is striking: new homes cost roughly 70 percent more than their older counterparts, a trend that has persisted for years and reflects the long path back from the bust to a steadier market equilibrium. This dual evolution is a key finding of the ImmoCojuncture 2023 Alicante appraisal and euro value report and is felt across Spain, with Valencia experiencing a particularly sharp divergence. [Citation: Euroval 2023]
Before the bubble burst in 2007, new builds and second‑hand homes each held about half of the market, with a combined total of 61,884 new constructions and 63,889 existing homes sold in the Autonomous Community of Valencia. The crisis hit the new construction sector hardest, dramatically curtailing supply and reshaping demand. As activity contracted, the pace of new projects slowed to a crawl, and it took years for the market to begin edging back toward pre‑crisis levels. By 2012, construction activity collapsed to just 1,329 properties, a figure that underscored how far the sector had fallen. Even as momentum returned after 2014, the scale remained modest, and 2019—the strongest year on record since the downturn—still saw only 7,532 new homes launched, a fractional share of the historic peak. [Citation: Euroval 2023]
Within the Valencian Community, new homes now represent roughly 10 percent of total market activity. In the most recent year, 10,134 new residences changed hands compared with 103,118 transactions for second‑hand properties, highlighting the enduring balance shift toward existing homes. This tilt toward the pre‑owned market coincides with a broader trend in Spain but remains especially pronounced in Valencia. The result is a market where property characteristics and buyer profiles diverge between the two segments, influencing pricing, financing, and development strategies across the region. [Citation: Euroval 2023]
In Alicante, developers have routinely claimed more than 50,000 new homes per year, but the reality fell dramatically after the crisis. The most severe downturn occurred in 2012, with a recovery path that has been gradual and uneven. Although activity gained some traction around 2014, the sector has not returned to its former scale. The Euroval report underscores that the current share of new construction remains small relative to the entire market, and the luxury status of new builds persists in many parts of the region. [Citation: Euroval 2023]
Prices illustrate the split between the two markets. In the pre‑crisis era, the premium for a new apartment over a second‑hand unit hovered around 18 percent, with average prices of 176,425 euros for new properties and 149,056 euros for existing ones. Today, the gap has widened dramatically. The average cost of a new home in the Valencia Region sits at about 225,316 euros, an increase of roughly 27.7 percent from the post‑bubble period. Meanwhile, second‑hand properties average around 131,818 euros, still reflecting a decline from 2007 levels. The divergence since 2007 highlights how market preferences have shifted and how supply constraints continue to shape pricing dynamics. [Citation: Euroval 2023]
Beyond price, the structure of supply and demand has evolved. The recession did not erase demand; it redirected it. New housing tends to be built with modern specifications and higher standards, often aimed at a different buyer group than a decade ago. On the other hand, the secondary market remains robust in many coastal areas, driven by buyers seeking established homes with mature urban infrastructure and, increasingly, international buyers seeking residence in a desirable climate. The long‑term effect is a growing disconnect between the types of homes being built and the needs of traditional local buyers. This is not merely a regional anomaly but reflects a broader national pattern that policymakers and developers are watching closely. [Citation: Euroval 2023]
The influx of demand from eastern markets has also impacted price dynamics in Alicante. While technical requirements and environmental standards rose during the entry period, they were matched by greater expectations from buyers and tighter budgeting by developers. In Alicante, the average construction cost per square meter rose from about 361 euros in 2007 to higher figures reported in the early months of the current year, illustrating how cost pressures have fed into overall housing prices. These shifts occur alongside regulatory upgrades and a stronger emphasis on energy efficiency and waste management, factors that raise the upfront price of new builds but can improve long‑term value and sustainability. [Citation: Euroval 2023]
The market’s future trajectory in Alicante and the Valencian Community remains linked to macroeconomic conditions, credit availability, and evolving regulatory standards. While new constructions have not returned to their historical heights, the segment continues to grow cautiously, with buyers increasingly weighing not just price but long‑term value, energy efficiency, and quality of life. The second‑hand market, meanwhile, reflects a more stable, localized demand, supporting a diverse range of neighborhoods and housing types that meet the needs of residents and international buyers alike. [Citation: Euroval 2023]