For the last seven years Alicante has consistently topped the list as the province with the highest proportion of foreign buyers. In combination with low but steadily growing prices, increasing numbers of sales transactions and an unrivalled quality of life, Alicante is currently being lauded as one of the key hotspots for future foreign investment.
“Alicante remains a top lifestyle destination with favourable conditions for potential growth as it is still one of the most affordable on the Mediterranean coast,” explains Valentina Sileike, Director of Lucas Fox Alicante. “Compared to other regions across Spain, Alicante offers excellent value for money and a high standard of living with a mild, sunny climate all year around, the beautiful Mediterranean Sea, a variety of stunning beaches and much more.
New boutique restaurants and trendy shops are popping up all the time and there is a significant amount of renovation and regeneration taking place. It really is an ideal scenario for investors who want both a healthy rental yield and a long-term return on their property purchase.”
The importance of foreign buyers to the Alicante market is clear from the latest figures from the Spanish Land Registry. In the second quarter of 2019, the proportion of buyers in the province from outside of Spain was 42%, followed by Tenerife with 29%, Málaga Province (which includes the Costa del Sol) with 28%, the Balearics with 27% and Girona Province (which includes the Costa Brava) with 26%. When compared to the three main Spanish provinces, the proportion of foreign buyers is almost four times that of Valencia province and Barcelona province and nearly seven times that of the Community of Madrid.
With regards to prices, according to property portal Idealista in June 2019 the average property in the province of Alicante cost just €1,555 per square metre, 42% below that of the Barcelona average (€2,693 per square metre) and one of the lowest in all the Mediterranean locations popular with foreigners. Year-on-year prices in the province rose by 5.7%. In the city centre however, renovated re-sale or new build properties are selling for between €3,000 and €5,000 per square metre.
In the 2018 report by the Spanish Land Registry, the Valencia region (which includes Alicante) was most popular among British buyers (17%), followed by the Swedish (9%), the Belgians (8%) and the French (6.5%).
“We expect the Alicante property market to become increasingly influenced by the purchasing patterns of international buyers over the coming years,” adds Sileike. “American, British and Norwegian property buyers have been increasingly active recently and we expect that they will continue to shape the market especially for re-sale properties in the city centre, sea view properties and those close to the beaches.
There are currently several building projects in and around the city of Alicante and a high demand for homes in the city centre. We see this demand increasing and, as a result, the sector growing significantly, which should create a new prime market in Alicante. There is also increasing demand for short-term rental homes, both in the centre and popular beach areas such as Playa San Juan, El Campello, Gran Alacant and Santa Pola.”
Sales transactions in Alicante Province fell marginally year-on-year from January to June 2019 but have risen sharply (56%) in the same period since 2014, according to data from the National Institute of Statistics. The value of sales from the first quarter of 2014 compared to the first quarter of this year has increased by nearly 74% according to the Spanish Department of Development.
Recently, Alicante has been diversifying its offerings to both tourists and residents providing a wide range of both cultural and sports activities, including cycling, hiking, mountaineering, a variety of water sports, sailing, impressive golf courses, equestrian sports, award-winning gastronomy and viniculture. Many of the charming, unspoiled towns within the province are well connected by both road and rail. TRAM, an 80km coastal train line, connects Alicante with Dénia in the north and stops at resorts along the way. The fast-speed AVE takes two and a half hours to arrive in Madrid. Alicante airport is Spain’s third most important in terms of passenger traffic and flight destinations, and is also one of the busiest airports in Europe with the likes of Vueling, Ryanair, Norwegian air and Air Nostrum using it as a base.
“Alicante is a fast-developing region with superb potential in terms of business and real estate,” explains Sileike. “One of the most exciting innovations is the Ciudad de La Luz, an audiovisual and digital centre that has been compared to California’s Silicon Valley, attracting investors and new talents. Alicante is also home to EUIPO (European Union Intellectual Property Office), located just a few minutes from the city centre. Its building in the Agua Amarga area is the most sustainable in Spain.”
Alicante’s port area is also key to the local economy and development of real estate. It is the main logistics platform in the province and was the permanent headquarters of the Volvo Ocean Race until 2018. The sports dock has a capacity of about 2,300 berths and will soon expand to incorporate superyachts. The port has developed and grown alongside the city, creating a better maritime environment for the booming tourist industry and the city’s residents, allowing a greater harmonisation with urban planning especially along the coastline.
Other recent major projects in Alicante include the newly opened Casa Alberola Hotel Alicante, one of the Hilton Hotel’s Curio Collection. Built in 1894, the boutique hotel is surrounded by the city’s key tourist attractions including the Santa Barbara Castle, Central Market, Gravina Museum of Fine Arts, MACA Contemporary Art Museum and Archaeological Museum of Alicante.
The Pau 3 project is currently going through the last phase of approval, a huge urban development scheme that will create 1,600 homes in the north east of Alicante on a plot of 690,000 square metres, which will include schools and green spaces.
Meanwhile Savills Aguirre-Newman has a new base in the city with the aim of creating retail spaces, hotels, logistics centres and residential buildings across the region.
“The presence of EU institutions, annual international business events and the highly respected University of Alicante also attract foreign investment and contribute to the development of the region,” adds Sileike. “The local government is currently evaluating possibilities of developing a Tax Free Zone near Alicante to create even more opportunities for business development and international investment. The future of the region certainly looks exciting.”