Average house prices rise by 11% throughout the Costa Blanca

Despite previous industry warnings that 2023 would see a fall in Spanish house prices, local Costa Blanca property prices continue their relentless rise.

A FALL IN THE SUPPLY of new build and resale homes across the Spanish coastal regions continues to buoy property prices nationwide. The latest data released by real estate industry powerhouse, Idealista, illustrates the correlation between supply and demand.

Idealista notes that the supply of homes for sale has been significantly reduced in almost all Spanish coastal areas, which has fuelled an increase in property prices - despite a cost of living crisis and increasing borrowing costs over the past 12 months.

19 out of the 22 coastal Provinces have seen a reduction in the local housing stock, with only Spain's northern Atlantic coast, Granada, and Costa Calida showing any signs of moderate growth.

In all the other Spanish coastal communities, including the Costa Blanca, buyers looking for a property for sale will find less on offer than a year ago.

Costa Blanca property prices in the Alicante Province

Both ING and Bankinter forecast that prices would fall during 2023 earlier this year.

ING's 2023 forecast cited increasing interest rates and stricter lending conditions ultimately slowing down the property market's momentum.

The Dutch multinational banking and financial services corporation stated that the Spanish property market is still expected to outperform the Eurozone average thanks to robust and sustained demand.

Bankinter's Analysis Department released its quarterly report on economic forecasts in March, indicating that house prices should enter an "adjustment phase" during 2023 and projecting a 5% downturn in house prices during 2023-2024.

The Spanish financial services company cited a higher cost of mortgage financing and lower household savings as the two main forces placing downward pressure on Spanish house prices. 

Less new build homes entering the property market

However, neither forecast has yet come to fruition, and the property market has shrunk by 3.0% over the past 12 months in the Alicante Province alone.

Nationwide, Valencia reported a decrease of 18.0% over the same period, with Tenerife recording a negative annual stock variation of 30.0% - the largest in the Spanish territory.

Furthermore, an increase in the cost of fittings and materials for new homes has resulted in developers finishing fewer properties, delaying the construction of developments, and passing on additional costs to overseas property buyers.

The result is increased asking prices and longer lead times for new build properties in the most sought-after areas placing an additional burden on the resale market.

With fewer new homes entering the local Costa Blanca property market and many new build properties being priced beyond the financial reach of most potential holiday home owners, many buyers and investors are turning to the resale market.

The attraction of nearly-new properties at resale prices

Nearly-new and modern resale properties offer many of the ownership benefits of new build homes, often with a price point far lower than an equivalent new property today.

With no improvements in residential housing stock on the horizon, modern resale properties are likely to attract buyers and investors looking to secure their dream home in Spain.

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Do you own a modern property that you want to sell? At Inmo Investments, we help you get the best price for your home. Our extensive network of qualified buyers and a tailor-made comprehensive service make the sales process smooth and profitable.

Discover the potential of your property and save time, money and stress when selling on the Costa Blanca. Contact us today for a free, non-binding property valuation.