Market rent in the province of Alicante continues to show signs of overheating, yet the Generalitat and the real estate sector disagree on the remedies needed. The Valencia government welcomed Pedro Sánchez’s plan to mobilize up to 50,000 Sareb homes for social rental and backed a new law designed to limit rent growth. Promoters and developers, however, warn that price caps could scare off homeowners and shrink supply, potentially worsening the overall housing shortage. (Source: Idealista)
Recent data illustrate growing difficulty in securing suitable housing in the region. Idealista reports a 9% decline in available rental housing across the province, with Alicante city facing even steeper pressure of 19%. The current volume of rental flats remains at its lowest level since 2017, marking a multi-year trend of tightening supply and rising rents. (Source: Idealista)
Owners’ hesitancy to rent out properties persists, driven by fears that protections for vulnerable tenants could hinder evictions of defaulters. This reluctance has contributed to a tighter market and higher competition for the homes that do become available. (Source: Idealista)
Existing flat stock in Alicante decreased by 9%
Fotocasa identifies the shortage of stock as a key driver of rising rents, which averaged 9.97 euros per square meter across the province last year, an increase of 21.6 percent. Typical rents for an 80-square-meter flat hovered around 798 euros, a figure that stretches many family budgets. Yet there is a sliver of optimism: the first quarter shows a modest 1.5% uptick, suggesting a slight easing in the pace of increases. (Source: Fotocasa)
Facing housing access challenges, Consell’s second vice president and regional housing head, Héctor Illueca, expressed satisfaction with the central government’s new housing law, which aligns with investment partners. He highlights two focal points: reducing the threshold from 10 to 5 digits for certain owner protections could widen measures against owners who refuse to rent, and establishing a new rent revaluation index independent of CPI, around a 3% cap for next year, with further controls in areas deemed under pressure. Illueca adds that procedures to implement these changes will begin in the Valencian Community the day after the law’s approval. (Source: Provia)
The Housing Act will limit rent growth to 3% in 2024 and then set an index to cap the increase annually.
Within this framework, Consell’s leadership notes that Generalitat has already identified 83 municipalities with high housing needs, a list to be updated as new stress indicators are defined. Ximo Puig, who leads both Illueca and the Generalitat, welcomed Sánchez’s plan to mobilize 50,000 Sareb homes for social rental and lamented that the measure did not come sooner, as Podemos had proposed. (Source: Provia)
Less Offers
Developers and real estate agents see the law differently. They fear more owners will pull their properties from the market, and without clear certainty, price ceilings could deter investment and reduce rental activity. Marife Esteso, president of the Alicante College of Realtors, warns that the measure could worsen the supply scenario, and questions the specifics of Sareb’s portfolio and where the homes would be located. (Source: API)
Jesús Ros, secretary of the Provia supporters association, argues that Sareb’s social rental volume is too small to influence overall prices and that some Sareb assets lie in areas with weak demand. Proponents of the law resist price interference and advocate increased public housing budgets, along with stronger tax incentives and direct aid. They point to the limited production of VPO homes since the 1990s, noting that only 256 of more than 5,000 planned units were built last year. (Source: Provia)
Looking ahead, the upcoming territorial regulation is expected to adjust the VPO framework, potentially raising maximum prices and unlocking new development. Ros argues that the current price caps have effectively frozen assets since 2013, and the revised limits could spur more promotions at viable prices. He cites a potential rise in the maximum price for a VPO home from 85,000 euros to as much as 118,000 euros in some municipalities, with a target cap around 154,000 euros in others, aimed at stimulating investor interest. (Source: Provia)
Idealista’s Francisco Inareta criticized the Housing Law, saying it demonstrates ongoing misreads by the government and coercive tendencies toward homeowners. He argues the core problem is a lack of supply, and that the measures enacted so far have crowded out existing options and worsened access for the most vulnerable groups. He notes that even the 2% rent update cap, just year old, has begun to erode the market and create new barriers for those seeking housing. (Source: Idealista)