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The Costa Blanca in 2019

Costa Blanca mapThere is definitely more optimism around in the Spanish property market in 2019. And that’s also true in the Costa Blanca region. However, it may be too soon to be totally confident that everything is going in the right direction. There is still a possibility that economic and political issues could make the market change course. Firstly, the independence issue in Cataluña is on-going, as is Brexit. Secondly, if the economy slows there it may spill over and negatively affect national growth. Nevertheless, the statistics are looking good. According to 2018 figures property prices rose an average 6.49% in the period. In addition, transaction numbers were up 9.7% nationally with the overseas market registering another all-time record. In 2018, 103,673 foreigners bought in Spain. Of these almost one in three (29.14%), chose the Costa Blanca region.  Click on the map to enlarge it for more detail.

These figures are undoubtedly positive.  However, the property market was in a deep hole for the last decade and there’s a way to go. So far, Palma de Mallorca is the only location in Spain where prices have exceeded pre-recession levels. Elsewhere, in many places prices are still anything between 15% and 25% below pre-crisis highs.  Even better, the Costa Blanca region is still 25%-30% below peak levels.

Two Property Markets

However, in our opinion, property buyers from overseas shouldn’t focus too much on national price trends. This is because Spain has two property markets and they operate completely independently of each other. And even within the two markets there are further divisions between prime and secondary locations. While prices are growing in the prime areas they remain stagnant in the secondary ones. Average prices tell buyers much more about the domestic market. But 65% of all property purchases take place in just four regions. Unsurprisingly, one of those is Madrid while the rest are where the majority of foreign buyers head for. One of those regions is the Costa Blanca.

The Costa Blanca

The Costa Blanca is the 200 kilometre stretch on Spain’s eastern Mediterranean coast. Alicante is the provincial capital and Javea and Denia are the prime locations for overseas buyers. However, the Costa Blanca is also more loosely used to describe everything between Cataluña and Andalucía. Specifically, the provinces of Valencia, Castellón, which make up the Comunidad Valenciana, and Murcia.  It’s true there are high-rise resorts on this coastline but there are also some of Spain’s most stunning beaches. These range from unspoilt white sand beaches to small, rocky coves.  Valencia is one of Spain’s most beautiful and historic cities.

Taken as a whole, there are more foreign buyers in this region  than anywhere else in Spain. The notarial returns for 2018 showed a total of 35,295 purchases made by buyers from overseas in the region’s four provinces. This means that 34% of all international buyers in Spain bought in this region. However, this reports focuses on the Alicante region as it is the most active, at least in respect of overseas buyers. As a result, it is an excellent example of what is happening in the different sectors of the property market. It clearly shows why we maintain that the overseas and domestic markets operate to different rhythms.

A Market of Two Halves


11th century Guadalest Castle in Alicante provinceAlicante, along with the rest of Spain, has endured the worst economic crisis in Spain’s recent history. It’s true the unemployment rate is falling but at 16.4% it’s still the second worst rate in the E.U. Only in Greece is it worse. And in spite of the improvement the under 35 age group is still suffering disproportionally. In this age group the average rate of unemployment is 38.2%. But we must remember that averages mask regional variations and it’s still above 50% in places. The grim reality is that at the end of 2018 five of the ten worst unemployment black spots in the EU were in Spain.  (Source: Eurostat) As a consequence, purchasing power remains low in the domestic economy.

Population has decreased in this region because of emigration. In part this is due to other nationals returning to their countries. But Spaniards are still being forced to look for a job abroad. And the bad news is that those Spaniards are the most skilled and best educated.  Statistics like these help explain why the domestic property market is still much weaker than the international one.


On the other hand, the overseas property sector experienced continued growth during 2018 on the Costa Blanca. Attracted by the Mediterranean climate and wonderful beaches, overseas buyers are drawn by prices at levels last seen back in 2002. The importance of foreign buyers to the Alicante market is clear from the 2018 statistics. A total of 21,023 overseas buyers purchased property in Alicante province, that’s about 65% of all foreign buyers in Valencia and Castellón combined. And while across Spain international buyers accounted for approximately 18.2% market share they make up nearly half the total market in Alicante, 21,023 foreigners compared with 22,717 Spanish residents.

These statistics beg the question: why so many foreign buyers. One answer has to be affordability. We believe the most reliable way to compare prices in different locations and regions in Spain is to look at the price per square metre. With asking prices all over the place this is a much better way to check if you are paying the right price for current market conditions.  Across the region foreigners paid an average €1,331 per square metre in 2018, the lowest of all the Mediterranean locations popular with overseas buyers. Compared with the €2,887 average per square metre in the Balearics and €1,705 in Andalucía the Costa Blanca is still affordable for most buyers.

Costa Blanca 2019 – Conclusions

A beautiful Javea beach on the Costa BlancaMy conclusions are similar to last year’s since the factors affecting the property market on Spain’s eastern coasts are unchanged.  Or changing only very slowly. As regards the domestic market I believe it is going to remain flat or even fall for two reasons. Firstly, unemployment remains around 15% of the active population. A recent report suggested it take an average of six years for a young person to find a job. There are signs of improvement but many new jobs are on temporary or part-time contracts.  In addition, there’s been a big increase in the number of self-employed. And inevitably, many jobs are seasonal in an area with a large tourist economy, such as the Costa Blanca.

Secondly, although the banks are making encouraging noises that might lead one to think the mortgage drought is over, that’s all they are really, encouraging noises. A buyer will need a large deposit as bank valuations remain low relative to the price agreed. In addition, banks are are scrutinising the status of buyers as never before. So, while offers of 80% LTV give buyers hope, the subsequent low valuation often means they have insufficient funds. And the recession and housing crisis seems to have changed attitudes to home ownership in Spain.  Many now see renting as an alternative, particularly among young families.

Affordability is key

Nevertheless, the Costa Blanca remains a top location, one of the most affordable on the Mediterranean coast.  Indeed, compared with other regions it remains very competitive. Bear in mind that the average price for a second hand property is €119,000 and €224,000 for new constructions. But prices like these are not going to remain for much longer, certainly not in the prime areas that most overseas buyers head for.

This report will be updated throughout 2019 as new data becomes available so do check back for the lastest information. Or you can follow us on Twitter and Facebook by clicking the buttons at the bottom of the page. For our report about the Spanish Property Market in general click here.  And read our blog which focuses on 10 of the best Costa Blanca Beaches.

©Diego Sabater

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