Alicante is a city in Spain on the Mediterranean coast. It is in the namesake province and is one of the largest cities in the Valencian Community. Alicante has an excellent infrastructure, including a well-developed road network, an international airport, a seaport, a railway station, and many types of public transport. It has a pleasant, typical Mediterranean climate, with warm winters and sunny summer days. The city is next to beautiful beaches and offers a variety of activities, from visiting cultural sites and museums to diving and golfing. All these advantages make Alicante an attractive option for holidays, relocating, and investing in real estate.
Content:
- State of the Alicante real estate market in 2023
- Housing prices in Alicante
- Popularity of Alicante among foreigners
- Return on investment in real estate in Alicante
- We will help you buy property in Spain
State of the Alicante real estate market in 2023
The Alicante real estate market is currently booming. In the first 6 months of 2023, 6% more homes were sold in the province year-over-year. Buyers more often purchase houses in Spain on the secondary market. When it comes to the volume of transactions with resale properties, Alicante ranks third in the country after Madrid and Barcelona.
Housing prices in Alicante
As of August 2023, the average price of residential real estate in Alicante reached €1,899 per 1 m2, the highest over the last 2 years. The highest housing asking price was recorded in Playa de San Juan and amounted to €2,597 per 1 m2. The lowest one was in Zona Norte—an average of €923 per 1 m2.
If we talk about the province of Alicante, on a year-over-year basis, housing prices in the municipality of Algorfa increased by 41%, in Formentera del Segura, by 38.8%, in Dolores, by 38.7%, and in Benijófar, by 31%. In large cities, real estate prices have also risen. In the city of Alicante, the cost of 1 m2 increased by 14% year-over-year, in Torrevieja, by 16.1%, and in Orihuela, by 18.5%.
In the municipality of Villajoyosa, houses cost 21.1% more than in 2022, in Calpe, 20% more, and in Dénia, 16.6% more. In the city of Elche, the changes are more moderate: the difference compared to last year is 8.1%.
Popularity of Alicante among foreigners
Alicante is the leading province in home sales to foreigners. It accounts for 24.3% of all housing sales in Spain to overseas nationals. Alicante attracts foreign buyers for several reasons. Here are the main ones:
- It has one of the most comfortable climates in Europe with more than 320 sunny days a year.
- Alicante is located on a coastline with many picturesque beaches of golden sand. One of the most famous is Postiguet, which consistently attracts both locals and foreigners.
- Cultural heritage. The province of Alicante is rich in historical sites. The city is home to the ancient Chapel of Santa Cruz and the Castle of Santa Bárbara on Mount Benacantil, which offers stunning views of the sea and surrounding area. The central Carmen Plaza has many restaurants, bars, and cafes, and at the marina, you can rent a yacht and enjoy a boat trip.
Most foreign buyers acquire property without a mortgage, but, if necessary, they can take one out. Residents can get up to 80% of the purchase value on a mortgage for up to 40 years. As for non-residents, they can take out a mortgage of 50–70% of the cost of Spanish property for up to 15–20 years.
Return on investment in real estate in Alicante
Investing in real estate in Alicante is profitable. As of 2023, when renting out a 1-bedroom apartment at an 89% occupancy rate, the owner can expect an average annual revenue of €25,400. The return will depend on the property type, its location, and amenities. Alicante is made up of more than 45 neighbourhoods, each with its own ROI.
Here are the top 5 neighbourhoods to invest in Alicante:
- Centro Traditional. This is a trendy area overlooking a yacht marina. Here you can find both resale properties and popular development projects in Spain with modern amenities.
- La Albufereta. The neighbourhood consists mainly of premium gated residences with swimming pools, tennis courts, and lounge areas.
- Playa de San Juan. The namesake beach is the famous landmark of this neighbourhood. This is a quiet and peaceful community, which is perfect for families with children.
- This is a lively area with picturesque markets, ancient churches, and squares with historical sights.
- Ensanche Diputación. The seafront neighbourhood is located next to Postiguet Beach, the Explanada de España walkway, and a shopping district.
The most popular type of property among tenants in Centro Tradicional is a 2-bedroom apartment, which can be purchased for an average of €260,000. The gross yield from short-term rentals here is 13.28%, and the annual revenue is about €34,500.
In La Albufereta, 2-bedroom apartments are also the most popular. An apartment in Spain here can be bought for an average of €220,000. The rental yield remains unchanged at 14.55% and the annual revenue is €32,000.
In Playa de San Juan, a 2-bedroom apartment costs an average of €230,000. The gross rental yield is 13.52%, and the annual revenue is €31,100.
In Mercado, this type of property can be purchased for €195,000. The gross rental yield is 14.27%, and the revenue is about €27,800.
In Ensanche Diputación, the most popular units are 1-bedroom apartments. Their average cost is €156,000. The neighbourhood offers a gross rental yield of 17.26% and an annual revenue of €26,900.
The best cities to invest in the province of Alicante are Elche, Benidorm, Torrevieja, and Dénia. The best investment option here would also be a 2-bedroom apartment. In Elche, the average cost of such a property is €134,000. The annual revenue is €23,400, and the gross rental yield is 17.47%. The cost of this type of property in Benidorm is €190,000. The annual revenue is €23,200, and the gross rental yield is 12.22%.
A 2-bedroom property in Torrevieja can be purchased for €96,000. The rental yield is 15.58%, and the annual revenue is €15,000. In Dénia, a 2-bedroom apartment costs €195,000. The annual rental revenue is €17,600 with a 9.04% yield.
We will help you buy property in Spain
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