Costa Blanca property market report
Contents
Costa Blanca Real Estate Market 2019
Real Estate Prices on Costa Blanca
Costa Blanca Real Estate Price Forecast for 2020
Costa Blanca Real Estate Market After Brexit
Conclusion
Costa Blanca is located along the Mediterranean Sea in the province of Alicante and stretches approximately 250 kilometers of beaches, cliffs and bays. The climate, beaches and lifestyle attract both tourists and real estate investors.
Alicante-Elche airport received almost 14 million passengers in 2019. The region attracts Spanish tourists from Madrid and central Spain looking for resort property, as well as a significant number of foreign buyers.
Popular destinations include: Benidorm, Denia, Javea, Altea, Santa Pola, Alicante, Torrevieja and Orihuela Costa.
Main countries of origin for buyers:
United Kingdom
Germany
Netherlands
Norway
Residents of Northern Europe (England, Germany, Belgium, Netherlands) make up a significant portion of the population of many municipalities, sometimes exceeding the number of native residents. Typical buyers are middle-class representatives aged 50–65, close to retirement or already retired, investing savings in apartments, townhouses or bungalows.
1. Costa Blanca Real Estate Market 2019
Costa Blanca ranks third in real estate demand in Spain after Madrid and Barcelona. The region played a key role in the recovery of Spain’s tourism and construction sectors after the 2007 crisis.
- Number of transactions grew more than 10% in 2018
- Sales periods for new construction shortened
- Local developers continue to expand resort housing construction
South Costa Blanca Real Estate Market
Main destinations: El Campello, Alicante, Elche, Santa Pola, Guardamar del Segura, Torrevieja, Orihuela Costa, Pilar de la Horadada.
- Balanced markets: Alicante and Santa Pola — balance between new construction and secondary housing, between rental and purchase
- Predominantly secondary market: Guardamar and Torrevieja
- Focus on new construction: Orihuela and Pilar de la Horadada
Demand and New Projects
Los Arenales, La Marina and Santa Pola show significant construction activity. The El Campello resort market is practically full — no new offerings. In the San Juan area (Alicante), homes for permanent residence are being built. Gran Alicante offers substantial choice of housing for permanent residence.
In Los Arenales, La Marina and Gran Alicante — hundreds of homes under construction. Elite housing is available on the Cabo de las Huertas waterfront.
Resort housing stock: residual in Guardamar del Segura and Pilar de la Horadada; deficit in Torrevieja and Orihuela Costa.
Most sold properties: townhouses ~100 m² of average quality in Guardamar and Torrevieja; average and high quality in Orihuela Costa and Pilar de la Horadada. Apartment supply is renewed through new projects.
Torrevieja and Orihuela Costa lead in the number of construction permits issued throughout the Valencian Community.
Who are the buyers?
Los Arenales: oriented to international clients. Domestic demand — from Elche, Madrid, Castilla-La Mancha, Castile and Leon, Basque Country. Foreign buyers — from Western Europe, Scandinavia, United Kingdom and Russia.
Torrevieja and Pilar de la Horadada: demand is distributed between domestic and foreign buyers.
Orihuela Costa and Guardamar del Segura: predominance of foreign buyers. Foreigners in Torrevieja buy predominantly townhouses; in the apartment segment the share of foreigners is lower.
Existing Problems and Deficits
Alicante: deficit of ready plots (except for actively developing San Juan). La Marina, Los Arenales and Santa Pola still have plots for development. Growth in land prices recorded in La Marina, Los Arenales and Santa Pola. El Campello’s 2011 general plan was cancelled; the 1986 plan is in effect, slowing development.
Other areas: limited number of plot transactions in Torrevieja, Orihuela Costa and Pilar de la Horadada. Minimal activity in Guardamar del Segura. Slight growth in land prices recorded in all locations.
North Costa Blanca Real Estate Market
Main resorts: Denia, Els Poblets, Javea, Benitachell, Moraira (Teulada), Benissa, Calpe, Altea, L’Alfàs del Pi, Benidorm, Finestrat, Villajoyosa.
The resort housing market is clearly recovering in Denia, Javea, Moraira and Benissa. Except for Finestrat (which has many development plots), most towns have attractive resort markets but experience a shortage of ready plots. Benidorm is in a particularly constrained position.
Demand and New Construction
Most sold properties:
- Denia and Javea: apartments in gated complexes, 70–100 m², 2–3 bedrooms, coastal areas (especially second line), average quality, old construction
- Benissa and Moraira: detached houses of 300 m², mountain locations with sea views
- Benidorm: rental market exceeds purchase market; typical properties — houses with 2–3 bedrooms in residential complexes, above average quality
New construction:
- Denia: ~200 homes
- Javea: ~300 homes
- Benissa and Moraira: individual housing projects
Denia and Javea: apartment buildings in gated complexes, average to high quality, 2–3 bedrooms, 90–110 m². Moraira and Benissa: high-quality detached houses, 300 m² construction, 800–1,000 m² plots.
Finestrat, Calpe, Alfaz del Pi and Villajoyosa: renewed smaller-scale projects, residential complexes under 100 units, apartments with 2–3 bedrooms (80–105 m²), high average quality. Local developers work with their own funds.
Who buys property here?
Domestic demand — from the Valencian Community and Madrid. Foreign buyers — from England, Germany and Russia (Benidorm — predominantly foreign buyers).
Land Plot Market Deficit
No shortage in coastal zones; shortage in urban areas. Limited stock of first-line plots, vulnerable at current sales rates.
- Benidorm: acute land shortage
- Villajoyosa: main resort areas (La Cala) are almost 100% full; some plots still available
- Price growth recorded mainly in Benidorm due to land shortage
- The Armanello area is paralyzed (legal problems), hindering necessary expansion
2. Real Estate Prices on Costa Blanca
Average prices for resort housing in the best residences are usually 30% higher than market averages. Property with sea views costs approximately 3 times more.
Price Comparison
Costa Blanca North:
| Property Type | Price | Characteristics |
|---|---|---|
| Multi-family housing | €2,200/m² in Javea | 2–3 bedrooms, 80–120 m², old (1980s) and new construction, above average quality |
| Individual housing | €3,100/m² in Benissa | 1980s villas, 300–350 m², many renovated, above average quality |
Costa Blanca South:
| Property Type | Price | Characteristics |
|---|---|---|
| Multi-family housing | €3,500/m² in Playa de San Juan | Townhouses and apartments, 90–105 m², 2–3 bedrooms, above average quality, ~20 years |
| Individual housing | €3,500/m² in Cabo de las Huertas | Villas 250–300 m², 4 bedrooms, above average quality, ~20 years |
| Multi-family housing | €3,500/m² on Benidorm waterfront | Apartments 105 m², 3 bedrooms, above average quality, 15 years |
| Multi-family housing | €1,900/m² in Punta Prima | Apartments in complexes with pools, 80–120 m², 2–3 bedrooms, up to 10 years |
| Individual housing | €3,500/m² in Altea | Houses 250–300 m², 4 bedrooms, above average quality, ~20 years |
| Individual housing | €2,300/m² in Villamartin (golf) | Villas up to 120 m², above average quality, 3 bedrooms, 2 bathrooms, up to 7 years |
The decline in average prices in some municipalities in 2018 is explained by sales of lower quality housing in less popular locations — with overall growth in resort housing prices.
Sales and Rental on Costa Blanca
European reality favors purchase: average bank deposit rate in Britain and Europe — ~1% per year; rental income — ~5%; real estate value growth — ~8% per year.
South Costa Blanca: rental is less relevant than purchase in Torrevieja and Orihuela Costa; almost irrelevant in Pilar de la Horadada. In demand are apartments with 2–3 bedrooms in residential complexes, above average quality.
North Costa Blanca: rental is less popular than purchase. In demand are apartments in gated complexes, above average quality, 2–3 bedrooms, 89–110 m², within walking distance of beaches.
2019 trends: the rental sector grew steadily. Beach destinations away from major cities (Alicante, Benidorm) showed high occupancy year-round with growing demand even in low season.
3. Costa Blanca Real Estate Price Forecast for 2020
Growth Indicators
- New construction is almost completely sold out before completion
- In half of Costa Blanca towns, the majority of buyers are foreigners
- Economies of buying countries show improvement
Expansion Zones
South Costa Blanca: Los Arenales del Sol and Gran Alicante show the greatest expansion with a large number of projects in excellent conditions.
Price Stabilization
- Guardamar del Segura and Torrevieja: prices have stabilized, slight growth observed in the large housing segment (townhouses, individual houses) in Guardamar
- Well-known Torrevieja complexes record price growth
- Orihuela Costa and Pilar de la Horadada: resort housing prices are improving, trends are strengthening
Expert Opinion
“In 2019, prices in Madrid grew significantly less than in 2018. Barcelona will also continue to lower prices; however, we will see much more noticeable growth in real estate prices in cities like Valencia, Zaragoza, Granada or Alicante — medium cities will take on the role of the largest ones, and noticeable price growth will be on their periphery.” — Gonzalo Bernardos, director of the master’s program in real estate consulting, management and promotion at the University of Barcelona
Resort Rental Trend
Many owners place housing on the short-term rental market for better returns during their absence. This is facilitated by legal protection and guarantees from management companies on Costa Blanca.
Number of Operations and Average Price Growth
In 2018, 500,000 homes were sold — for the first time since 2008. The 2019 goal is to consolidate positive growth above 10%. 2020 forecast: continued growth — cautious but noticeable price increases in major coastal tourist destinations.
Spanish Real Estate Market and Foreign Investment
Coastal real estate remains attractive to foreign buyers, especially from EU countries (Belgium, Netherlands, France).
Brexit consequences are expected to be compensated by increased interest from European buyers in acquiring second homes on the coast and real estate investments.
In 2020, high investment flows into Costa Blanca real estate are expected — apartments and villas in coastal zones with guaranteed returns due to sector growth and rental opportunities.
4. Costa Blanca Real Estate Market After Brexit
Despite Britain’s intention to leave the EU, the Costa Blanca real estate market remains stable and continues to grow after the initial shock.
British Buyer Loyalty
British buyers remain the most numerous among foreign clients of developers and real estate agencies — approximately 20% of all foreign purchases in Alicante province in 2018.
Market Reaction to Political Instability
Historical pattern: real estate markets follow macroeconomic realities during calm periods. Political instability causes slowdown, postponement of transactions and subsequent resumption. During periods of uncertainty, the number of transactions decreases; both sellers and buyers pause processes.
UK example: during the Brexit vote, consumer activity slowed. Real estate grew 6% in pounds sterling in 2017; in other currencies, value declined due to the fall of the British currency.
Costa Blanca Recovery Timeline
- Initial shock: Brexit announcement period
- Recovery beginning: end of Q4 2017
- Stabilization: Q1 2018 — 5,551 housing purchases by foreigners in Alicante, 10.9% growth compared to the previous year
Price Forecast
Significant price decline is not expected. The Spanish market does not offer “suddenly” fantastically cheap properties. The decline in British buyer activity will be temporary. No European alternative is comparable to Costa Blanca’s advantages (white sandy beaches, transport accessibility, living conditions).
5. Conclusion
- Housing prices have strengthened with increased demand
- Gradual reduction of housing stock
- Finding good deals is increasingly difficult, especially during high season
- Housing shortage due to lack of development land (especially in large cities and on the first line)
- Clear trend toward developing new urbanizations away from large cities
- Stable price growth throughout Costa Blanca
- Construction boom in full swing
We recommend not postponing the purchase for long: buying Spanish real estate today will be more profitable than in a month.