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What is happening in Costa Blanca’s real estate market? Are prices on the rise or decline? Is Alicante still a prime location for international buyers? How are local regulations and taxes shaping the property landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers alike, from Benidorm to Torrevieja and beyond. Perhaps you’re curious about the same things.
We know this because we stay closely connected with local experts and individuals like you, exploring the Costa Blanca real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed the mark or could improve, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll strive to enhance this content for you.
1) Northern European buyers will keep boosting demand in Costa Blanca
Foreign buyers are a major force in the Costa Blanca property market, especially those from Northern Europe.
In 2023, almost 45% of property deals in Costa Blanca were snapped up by foreigners, with Alicante standing out where 40% of transactions involved foreign buyers. British, German, and French buyers are leading the charge, with Brits still holding the top spot.
Interest from Germans, Dutch, and Scandinavians remains strong, showing a solid demand from Northern Europe. The region's natural beauty and sunny climate are big draws for these buyers, who are looking for a relaxed Mediterranean lifestyle.
The presence of Northern European community groups and social clubs in Costa Blanca highlights a well-established expatriate community. This adds to the area's charm, making it even more attractive to potential buyers from the north.
Real estate agents often report a high number of clients from Northern Europe, which underscores the ongoing interest in Costa Blanca properties. This trend is expected to continue, driven by the region's appeal and established expat networks.
Sources: Idealista, Fine & Country, Grupo Garcia, Euro Weekly News
2) Coastal rents will increase with growing demand from tourists and expats
Costa Blanca is buzzing with tourists and expats, making it a prime spot for property investment.
In 2024, the hotel association HOSBEC noted that Costa Blanca's hotels were 77.6% full on average, with summer peaks hitting 90.1% in August. This means more tourists are flocking to the area, and they're not just staying in hotels—they're also looking for rental properties.
Expats are also eyeing Costa Blanca. Back in 2021, the National Institute of Statistics (INE) recorded 373,423 foreign residents in the region. This influx is pushing up the demand for long-term rentals, which in turn is nudging rental prices higher.
The real estate scene here is on fire. Over the past year, property prices have jumped by 9%. If you're into luxury, those prices have soared by a whopping 20% over the last two years. Experts predict this upward trend will continue, with a potential 12% rise in property prices over the next five years.
With all this buzz, Costa Blanca is not just a vacation spot; it's becoming a hotbed for real estate investment. The combination of tourist demand and expat interest is creating a perfect storm for rising rental prices.
Sources: Euroweekly News, Euroweekly News, CaixaBank Research
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Brexit will slightly reduce British buyers, but interest from other European countries will increase
Brexit has led to a noticeable drop in British buyers in the Costa Blanca property market.
Once upon a time, British buyers made up a whopping 65% of the market in Costa del Sol, which includes Costa Blanca. Now, they account for just about 15% of property purchases. This shift is largely due to the 90/180 day rule and other Brexit-related restrictions, which have made buying property more complicated and costly for Brits.
In the second quarter of 2023, British purchases in Costa Blanca were 54% lower than the previous year. These new rules have added layers of bureaucracy, making it less appealing for British buyers to invest in the area.
Meanwhile, the Northern Costa Blanca is seeing a surge in interest from other European countries. Germans, Dutch, and Scandinavians are showing strong interest, and French-speaking buyers are also making their mark on the market. Real estate agents are reporting a busier-than-usual start to the year, thanks to these eager buyers.
With the British stepping back, the market is opening up for other Europeans who are keen to invest in sunny Costa Blanca. This shift is creating new opportunities for those looking to buy property in this beautiful region.
So, while Brexit might have slowed down the British, it’s clear that interest from other European countries is on the rise, making Costa Blanca a hot spot for international buyers.
Sources: Grupo Garcia, Altavista Property, Spanish Property Insight
4) Costa Blanca’s coastal areas will attract more investors with new luxury developments
The coastal areas of Costa Blanca are becoming a hotspot for investors, thanks to new luxury developments.
In 2024, 44.43% of properties in Costa Blanca were snapped up by international buyers, highlighting the region's global allure. This surge in interest is largely due to the area's stunning beaches, vibrant culture, and sunny climate, which make it a dream destination for many.
The luxury property market here is booming, with average sale prices jumping by 20% over the past two years. This rise is a clear sign of the strong demand for high-end homes, making Costa Blanca a prime spot for those eyeing luxury real estate.
Real estate agencies are buzzing with inquiries for luxury seaside villas and sleek urban apartments. These new builds are perfect for those wanting a taste of premium living, and the media is abuzz with stories of these exciting new projects.
Rental prices have also climbed, with a 15% increase on average in the past year. This means property owners can enjoy a steady stream of rental income, adding another layer of appeal to investing in Costa Blanca's luxury market.
Sources: TripInvest UK, Lind Property
5) Short-term rental yields will rise in tourist hotspots like Alicante and Benidorm
Tourist hotspots like Alicante and Benidorm are seeing a boom in short-term rental yields.
In 2023 and 2024, Alicante experienced a surge in tourist arrivals, leading to a 23% increase in holiday flats listed online. This uptick shows a growing appetite for short-term rentals, which is a major driver of rental yields. The buzz around Alicante isn't just about its beaches; it's also about the vibrant nightlife and cultural festivals that draw crowds year-round.
Benidorm is another favorite, with 1,875 Airbnb listings as of 2024, highlighting the strong demand for short-term stays. The median occupancy rate here is 64%, a testament to its popularity, especially during peak seasons. Visitors are attracted by the sunny weather, golf courses, and lively entertainment options, making it a go-to destination for international tourists.
In Alicante, the number of Airbnb listings has grown to over 4,100, with a third managed by professional leasing companies. This professional management often results in positive reviews and higher occupancy rates, boosting rental yields. The local cuisine and historic sites add to the allure, ensuring that properties are rarely empty.
For instance, a typical short-term rental in Benidorm is booked for 234 nights a year, with an average daily rate of €93. This consistent booking rate is a clear indicator of the area's appeal. The combination of sun, sea, and a bustling nightlife keeps the rental market thriving.
Both Alicante and Benidorm are not just about the beaches; they offer a mix of cultural experiences and leisure activities that keep tourists coming back. This steady influx of visitors is what makes short-term rentals a lucrative investment in these areas.
Sources: Airbtics, FTN News, Airbtics
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6) Coastal rental yields will rise as tourism recovers
Tourism is booming again in coastal hotspots like Costa Blanca.
In 2024, the Valencian Community welcomed over 10 million international tourists, a jump of 16.3% from the previous year. This influx has made coastal areas a magnet for visitors.
With more tourists, occupancy rates have skyrocketed. Costa Blanca hit a 77.6% occupancy rate in 2024, with some spots peaking at 90.1% during the busiest months, driving up rental yields for property owners.
Vacation rental platforms like Airbnb are also playing a big role. Properties near beaches and luxury resorts are in high demand, allowing owners to charge premium rates, especially when tourism is at its peak.
For those considering buying property, this trend means higher potential rental income. Coastal properties are becoming more lucrative as tourism continues to thrive.
Investing in these areas could be a smart move, as rental yields are expected to rise with the ongoing tourism boom.
Sources: Euro Weekly News, Travel and Tour World, Asset Folio
7) Costa Blanca's property prices will stabilize following a period of rapid growth
In 2023 and 2024, Costa Blanca saw a rapid rise in property prices, but things are expected to calm down soon.
One reason for this is the increasing number of properties available. In Alicante, for example, there was a 13.4% rise in new builds sold, which means more homes are on the market. This extra supply can help balance out demand, leading to more stable prices.
Experts are also noticing a slowdown in how fast prices are rising. They predict a modest increase of 2.8% to 4% in 2025, suggesting the market is cooling off. Major cities might see small price hikes, while less popular areas could even see prices drop.
Interest rates are another piece of the puzzle. The Euribor rate is expected to drop to around 2.65% by late 2024 and further to 2.1% in 2025. While this might boost demand, it also makes mortgages more affordable, which can help keep prices from skyrocketing.
Local governments are stepping in too. Some Costa Blanca towns have paused new tourist licenses to control growth and keep the area charming. This move can help prevent the market from overheating.
Real estate agencies are on the same page, predicting a small 6% rise in property values by 2025. This aligns with what buyers are feeling—more cautious due to rising prices and interest rates.
Sources: SGM Legal Spain, Fine & Country, Nardia, Spanish Property Insight, BRIC Group
8) Virtual reality tours will become more common, simplifying remote property viewing for foreign buyers
Virtual reality tours are transforming the real estate market, especially for those buying from abroad.
In recent years, more than half of adults have taken a virtual tour, and a whopping 67% of home buyers want virtual tours when checking out listings. This shift shows a clear preference for virtual tours over traditional photos, making it easier for buyers to explore properties from afar.
Listings with virtual tours get 87% more views, and potential buyers spend much more time on these sites. This means virtual tours aren't just a fad; they're a powerful tool to grab and keep buyer interest. In fact, over half of buyers have refused to consider properties without a virtual tour, showing how crucial this tech is in making decisions.
Take the Costa Blanca region, for example. It's a hotspot for foreign buyers, with 45% of property deals in 2024 involving international clients. Buyers from the Netherlands, the UK, Belgium, and Germany are particularly keen, highlighting the need for effective remote viewing options like virtual tours.
Virtual reality tours are becoming a staple in real estate, making it easier for foreign buyers to view properties remotely. This trend is especially important in areas with high international interest, like Costa Blanca.
Sources: SEO Proceed, Mediterranea Villas, Hispania Homes Moraira, Select Villas Moraira, PhotoUp
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Higher property taxes in some areas will push investors towards regions with lower taxes
Higher property taxes can make certain areas less appealing to investors.
Take Costa Blanca, for instance. The IBI property tax rates there are all over the map. In Torrevieja, it's a low 0.400%, but in Dénia, it jumps to 0.950%. This big difference can really sway where investors decide to put their money. Investors are always on the hunt for the best returns, and lower property taxes often mean they can get better rental yields and overall returns.
In places like Dénia, where property taxes are high, investors might not see the rental yields they want. This can push them to look at areas with lower taxes, like Benidorm. Real estate agents are noticing this trend too. They're seeing more clients interested in low-tax areas because of the attractive IBI rates.
When property taxes rise, the cost of owning property goes up too. This can slow down property sales, as we've seen before in areas with higher taxes. Regions with lower taxes often see more investor interest because the potential for better returns is higher.
Investors are savvy and always looking for the best deal. High property taxes can be a deal-breaker, pushing them to explore other regions where they can maximize their investment.
So, if you're thinking about buying property, keep an eye on those tax rates. They can make a big difference in your investment's success. Lower taxes can mean higher profits, and that's what every investor is after.
Sources: Inmo Investments, Property Guides, CaixaBank Research
10) The expanding expat community will boost international schools and amenities, affecting property values
The growing expatriate community in Costa Blanca is reshaping the region.
In 2023, Torrevieja saw a remarkable 6.7% population increase, making it the fastest-growing city in Spain, largely due to foreign nationals. This surge is fueling a demand for international schools and amenities tailored to expatriates. International schools like Phoenix International School in Alicante are seeing a rise in enrollment from these families.
New schools are popping up, such as Xabia International College, offering both Spanish and British curricula. This educational diversity is a magnet for expatriate families who want quality education for their kids. As these schools expand, the areas around them become more appealing to expatriates.
With more international schools, property values are climbing. Real estate reports show that property prices in Costa Blanca have jumped by 9% in the past year. The luxury segment has seen an even more impressive 20% increase over the last two years.
This trend is expected to continue, driven by the demand for properties near international amenities. Expatriates are particularly drawn to areas with these conveniences, boosting the local real estate market.
As the expatriate community grows, expect more international schools and amenities, further impacting property values. The presence of these facilities is a key factor in the rising property market.
Sources: The Olive Press, Casa Botnia Building, Lind Property
11) Demand for accessible and single-story homes will rise due to an aging population
The aging population in Costa Blanca is on the rise, thanks to longer life expectancies in Spain.
In Alicante Province, the number of people over 90 jumped by 6.04% between July 2023 and July 2024. This isn't just a blip; it's part of a bigger trend where the over-65 crowd is expected to grow significantly by 2037.
As people age, mobility becomes a challenge, making accessible homes more important than ever. Many seniors are looking for single-story homes because they’re easier to get around in.
In the real estate market, there's a clear uptick in demand for these types of homes. This shift is driven by the practical needs of an aging population.
For those considering buying property, this trend could mean a smart investment opportunity. Single-story homes are not just a preference but a necessity for many.
Keep an eye on these changes, as they could shape the future of real estate in the region.
Sources: Euroweekly News, Surin English, CaixaBank Research
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.