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The Housing Crisis in Alicante: A 15% Drop in Supply Amidst Record High Prices

The Housing Crisis in Alicante: A 15% Drop in Supply Amidst Record High Prices

2024 Ended with an 18% Increase Compared to December 2023 | Lack of Supply is a Major Obstacle

Óscar Bartual Bardisa

Alicante

Miércoles, 29 de enero 2025, 07:26

Housing in the province of Alicante is experiencing a favourable period in terms of purchases despite showing exorbitant prices. With 4,371 sales in November, according to the National Statistics Institute, the drop in interest rates has spurred real estate transactions in a market increasingly strained by a lack of supply.

The fall in interest rates has led to an increase in demand in a market with limited supply, unable to meet all buyers' needs. This situation continues to push prices up, breaking records. The situation becomes even more problematic in the city of Alicante.

The capital stands out as one of the most dynamic markets in the country and, according to the real estate portal Idealista, the price of housing in the city has risen by 18.2% between December 2023 and this month of 2024, placing the cost per square metre at record highs of 2,265 euros, even surpassing 3,100 euros in areas like Cabo de las Huertas and Playa de San Juan.

This situation is accompanied by a collapse in the supply of homes for sale. By the end of 2024, the stock of houses and flats on the market has decreased by 15%, the same percentage as the national average, although below major markets like Mallorca, Barcelona, Valencia, or Madrid.

Looking ahead, falling interest rates are driving property sales, which have entered a new 'boom' with more than 4,000 transactions each month, even surpassing 5,300 in the province in October. This situation further strains prices in the capital, where demand remains high amidst declining supply.

The real estate portal warns that this sales boom in the second half of 2024 has resulted in "the largest drop in supply ever seen in our country, with markets at minimal stock levels."

Idealista's spokesperson, Francisco Iñareta, explains that with low interest rates "it seems unlikely that demand will ease in the coming months," which will cause even greater pressure on prices. In Alicante, the main neighbourhoods have recorded maximum prices in December 2024, with several areas having square metre prices above 2,000 euros and the city centre nearing 3,000 euros per square metre.

In fact, year-on-year increases in neighbourhoods like Carolinas, Altozano, Babel, or La Florida exceed 22%, above the city average, with prices sometimes prohibitive for many middle and low-income families residing in these areas.

Shortage of Housing and Actions

Iñareta criticises that "despite the political effort announced by institutions and parties to accelerate the promotion of new housing, the market reality shows that price pressure will remain at least for the coming years, unless sufficient supply is provided in areas with the highest demand."

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todoalicante The Housing Crisis in Alicante: A 15% Drop in Supply Amidst Record High Prices