Inflation is pushing the market rent higher for many houses in the area. A rebound in demand after the pandemic, coupled with limited existing housing stock and owners reluctant to absorb income losses, has driven prices up. The latest year over year increase in the consumer price index has propelled the average price of homes listed in the province to new highs.
Data from the portal Idealista shows that as of April the average price per square meter stood at 8.4 euros, roughly 624 euros for a typical 80-meter square home, about 10 percent higher than a year earlier. Across 11 of the province’s 28 major municipalities, the portal now reports historically high prices, with most peaks occurring before the pandemic period.
In the provincial capital, rents have climbed to an average of about 8 euros per square meter, up 9.4 percent from a year ago and surpassing the prior record of 7.7 euros per square meter set during the early pandemic phase. This marks the third consecutive month above that level.
Benidorm is notable for its short term rental activity, which, although not fully captured in these figures, is trending toward 10 euros per square meter per month. Nearby towns show similar patterns, with Moraira reporting square meter prices around 10.9 euros and an estimated monthly rent of about 872 euros for an 80-meter apartment. These figures mirror trends in other tourist towns where rents are reaching record levels. In Calpe and Javea, annual increases approach or exceed 24 to 27 percent, highlighting a regional surge in rental costs.
Xabia records about 9.6 euros per meter, Calpe 8.7 euros, Cala de la Vila 8.5 euros, Santa Pola 8 euros, and Torrevieja around 7.3 euros per meter. While these towns are among the most expensive, others are following suit. Elche still offers relatively more affordable rents on the coast, with an average around 5.9 euros per meter after a 6 percent rise last year. Inland markets have also seen price gains, with alcohol sector rents near 5.6 euros, up 13.1 percent last year and inching toward its record.
Limited housing stock drives prices higher
Francisco Inareta of Idealista explained that the shortage of rentable homes is a central driver of the rising prices. In Alicante city the stock available for rent fell by 39 percent over the past year, while the province saw a 26 percent decline. This tightening market is linked to a broader shift in the national landscape, where the hybrid economy, the end of ERTE supports, renewed tourism, and the return of students and seasonal workers have reduced available inventory. As tourism rebounds, many workers in tourism-related roles return to the market, causing stocks to dwindle further.
Rental stock declines and market dynamics
Another factor contributing to price pressures is owner behavior. Some landlords raise prices to offset the impact of inflation, even as these increases are not always disclosed on listing portals. Although the government has permitted a 2 percent adjustment cap for rents on existing leases, this ceiling does not restrict the starting price of new contracts, allowing landlords to set higher initial rents for new tenants.
The net result is a rental market characterized by rapid price escalations, lower turnover of available units, and a mix of regulated and market-driven pricing. Prospective renters face higher monthly costs, while investors and landlords navigate a tightening supply that pushes values higher across many municipalities. In this environment, renters may be more motivated to seek long-term options in markets with greater supply stability, even as regional demand remains robust.
The data remains indicative of broader trends in housing affordability and supply. With stock levels shrinking and demand rebounding, rents across the province have demonstrated resilience even as inflation and economic recovery factors interact in complex ways. Market observers continue to monitor whether new construction and policy measures will ease the squeeze or whether price momentum will persist into the coming seasons.