Costa Blanca North - housing outlook 2024
As of the close of 2023, the real estate sector in the province of Alicante has demonstrated resilience, showing a mere 3% decline in sales and purchases, in stark contrast to the broader Spanish market, which experienced an 8.7% decrease. According to data from the National Statistics Institute (INE), 42,320 homes changed hands in Alicante between January and October, reflecting a marginal year-on-year decrease and constituting 50.39% of all property transactions in the Valencian Community.
Current state of the Spanish real estate market
The overall real estate sector in Spain is slowing, marked by moderated prices, a notable 8.7% reduction in sales by the end of 2023 and an upward shift in mortgage interest rates. The European Central Bank's monetary policy has contributed to a 4.5% increase in interest rates. Challenges in securing mortgages and financing for home purchases have resulted in a diminished pool of potential buyers, leading to a decrease in the overall volume of home sales. Notaries report a 14.9% year-on-year decline in sales and purchases in September 2023, with expectations that this trend will persist in the final quarter of the year. Interestingly, despite the drop in transactions, house prices have risen by 7% year-on-year up to November. Factors influencing this include inflation, imbalances in supply and demand, geopolitical instability and legislative measures such as the Right to Housing Act.
Outlook for the Spanish real estate sector in 2024
Experts are anticipating a continued downturn in transactions for the real estate sector in Spain in 2024, with forecasts ranging from an average decline of 5% to 10%. While Solvia predicts an approximate 8% contraction, Bankinter analysts foresee a 5% decline. Gonzalo Bernardos, a professor of economics at the University of Barcelona, suggests a potential 10% fall but anticipates a market recovery later in the year. Idealista also predicts a decline in transactions but expects a renewed demand. Mortgage activity has also seen a notable decrease, with the notaries reporting a 23% year-on-year fall in the accumulated volume of mortgage contracts between January and October 2023.
Forecast for the property market in Denia – Costa Blanca North
Despite the broader downward trend in Spain, the Alicante Association of Real Estate Agents predicts that the property market in the province of Alicante, and specifically Denia – Costa Blanca North, will remain stable in 2024, mirroring the figures from 2023. An influential factor in sustaining sales on the Costa Blanca is the significant contribution of over 43% of transactions by individuals of various nationalities, often choosing Alicante for retirement. Marifé Esteso Rubio, president of COAPI Alicante, expresses optimism for 2024, envisioning Alicante as an ideal province for both residential and investment purposes. Zoila Sanz, a real estate expert in Moraira and Costa Blanca North, highlights the security provided by mandatory registration of advisors in the Real Estate Agents Register of the Valencian Community (RAICV). Despite a slight slowdown in transactions in 2023, Sanz notes a positive sales and purchase volume, with Dutch investors in particular showing confidence in the region as a secure investment.
