Average property prices in Alicante

About Alicante

Alicante is the 5th most populous province in Spain after Madrid, Barcelona and Valencia, with 1.8 million inhabitants. A huge specificity of the province, is that foreigners represent 50% of the real estate transactions.

How expensive is real estate in Alicante?

While Spanish property prices are still 34% cheaper compared to their peak (2007), Alicante is an even better deal. Indeed, housing prices in Alicante are 42% cheaper than they were in 2007.

Graphically, we can see that buying a home in Alicante is now as cheap as it was in 2002. As you can see, real estate in Alicante’s province costs only 1,200€ per square meter. So, is now a good time to buy a home in Alicante?

Should we buy real estate in Alicante?

Clearly, the decision of buying a home isn’t based on rationality alone. Yet, let’s look at the Spanish real estate market as if we were investors.

Is now a good time to buy in Alicante?

What are the trends in Alicante’s property market now? Are people buying or selling? Is it a good time to buy? Considering how foreign buyers represent a huge proportion of transactions, two facts are quite interesting:

• Foreigners now buy as many properties in Alicante as they did in 2007, showing that the confidence is back to its peak level
• Foreign buyers now represent 50% of total property transactions, a proportion twice higher than it was 10 years ago

Yet of course, foreigners are not 100% of the property market in Alicante. So, how is Alicante’s real estate market doing if we look at the number of transactions and mortgages?

• Alicante is now the #3 Spanish province in terms of number of house sales, and #1 in Spain considering the ratio between property sales and population
• While cash buyers represented 70% of all real estate acquisitions last year in Alicante, the number of mortgages has grown by 19% in the past 12 months, bringing more buyers to the market

Even more importantly, we need to focus on two elements: liquidity, and property prices’ evolution.

How fast does it take to sell a property in Alicante?

According to Fotocasa (a leading property portal) 50% of property owners in Spain have tried to sell for more than 12 months. Although this sounds scary, this is not specific to Alicante. Indeed in Alicante, the liquidity has improved drastically. According to TINSA, selling a property is now twice faster than it was four years ago, as you can see below.

Property prices in Alicante: up or down?

Last but not least, are property prices going up or down? As house prices in Alicante went down for 8 consecutive years (from Q1 2008 to Q3 2015), they are now definitely entering a positive cycle. Also, property prices will benefit from two major factors:

• There are now 2 million additional jobs in Spain compared to 2013
• The mortgage market is recovering slowly, with a higher percentage of fixed interest rates (healthier on the long-term)

For all these reasons, we can expect that home prices in Alicante will keep growing over the next years. As real estate is 42% cheaper than it was in 2007, and quite affordable at 1,200€ per square meter on average, now is a good moment to access to property ownership at a good price.