The Property Investment Brief: Alicante, Spain

Where next to invest? We profile the world’s top property hotspots, detailing everything an investor needs to know.

The Essentials

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House Prices
1.8% in Q2 2017 (Valencian Community, INE)
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6.2% (Alicante, Idealista)
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Benidorm 11th most searched-for location in the world (Q2 2017,

Where is it?

Alicante sits in the south of Spain on the Costa Blanca – and it lives up to that “white coast” reputation, with a beautiful run of beaches stretching up the coastline through the Community of Valencia. The province is one of the most populous in Spain, with the capital city (also called Alicante) known for its beautiful architecture, laid-back lifestyle, lively entertainment scene and, of course, its Mediterranean climate. Strong train and airport connections to both other Spanish cities and international destinations have made it popular with both Spaniards and expats, with budget flights to Britain helping to fuel a thriving tourism industry.

Who lives there?

Mild and sunny weather brings tourists from across Europe to Alicante, with people from the Netherlands, Belgium and Germany all travelling south to its spotless beaches – and Spaniards living in Madrid and other inland parts of Spain also journeying to the area for the summer holidays. With several international schools to boot, expats have therefore established a strong community in the province, with the majority coming from the UK, followed by such countries as the USA, France and Italy. Benidorm, in particular, is a favourite among Brits, becoming the fifth most searched-for location in the world on during Q1 2017.

Benidorm, Spain
Benidorm, Spain

Why invest?

Spain’s always-thriving tourism sector is reason enough to invest in the country’s real estate, whether looking to turn a vacation into a more permanent lifestyle asset or seeking to benefit from the buy-to-let opportunities created by tourist demand. Combined with capital growth, as the country’s housing market starts to recover after bottoming out, and Spain’s appeal unsurprisingly remains strong in 2017. Indeed, according to official figures, Spanish property sales surged 14 per cent in 2016, with purchases by foreign buyers up 16 per cent.

On, Alicante is the second most popular part of Spain. The Community of Valencia, home to the province, accounts for almost one in five of all Spanish enquiries on The main city itself, meanwhile, is the 11th most searched-for location on the portal.

This is primarily due to its location on the beautiful Costa Blanca and its large community of existing expats, which makes hotspots such as Benidorm a natural choice for many house hunters.

Alicante saw the eighth biggest increase in property sales in February 2017, according to Spanish Property Registrars, with transactions climbing 17 per cent. The Community of Valencia, meanwhile, saw the fourth highest number of mortgage approvals in January 2017, helping to push the national total of mortgages approved up 16.9 per cent year-on-year.

Low prices, and low mortgage rates, have been major drivers of activity in recent months, as property values increase in the most popular tourist areas. In the Community of Valencia, property prices rose 1.8 per cent year-on-year in Q2 2017, with new homes seeing values rise 3.1 per cent in the year to date and existing homes seeing values rise 1.9 per cent in the same period. With Alicante more affordable than cities such as Madrid and Barcelona, the potential for capital growth as the market’s recovery strengthens has attracted investors from around the world.

Buy-to-let investors, too, are keen to capitalise on low property prices and rising rental rates. Returns from Spanish property have risen to 6.3 per cent in 2017 (from 5.5 per cent in 2016), according to Idealista. Alicante delivers a yield of of 6.2 per cent, the fifth best in the country. The area also has some of the least strict regulations for short-term rentals, making it more attractive for landlords than cities such as Barcelona. Nearby hotspots such as Campello can provide strong returns due to demand from commuters.

Alicante’s tourism scene, meanwhile, remains strong: the Community of Valencia currently has the fourth highest number of overnight stays in the country, with Benidorm’s hotel occupancy rate at 66 per cent, behind only Madrid and Barcelona. Commercial property investors can therefore expect strong returns too, with the Community of Valencia currently posting the highest annual ADR growth. With the housing market still recovering from the global financial crisis, and some resorts available at major discounts after their initial developers went bankrupt many years ago, there are also opportunities to be found for wealthy individuals or institutional investors.

Who’s Investing?

British buyers and investors have traditionally been the biggest players in Spain’s property market, particularly for residential transactions. Since the UK voted to exit the European Union, demand from British buyers has weakened, but wider international interest has offset any decline: demand for Spanish property hit a three-year high in Q1 2017 on, while figures from Spain’s Registrars show that foreign demand now accounts for 13.25 per cent of property transactions, the largest ever share recorded.

With the US dollar strong against the euro, Buyers from the USA are also active, along with other buyers from Northern Europe, such as the Netherlands and Sweden. Chinese and Middle East investors are also becoming a more notable presence, thanks to Spain’s Golden Visa scheme.

Agents say…

“Media headlines about Brexit will cause uncertainty and caution among some buyers, but Spain’s timeless tourist appeal will never change.”


Find out more:

View all properties for sale in Alicante