Impossible Rentals in Alicante: Prices Soar by 120% in the Last Ten Years

Rental prices in Alicante have reached alarming figures in recent years. According to data from the real estate portal Idealista, the rental prices in the city have experienced an increase that shows a worrying trend in the local real estate market because the price varies greatly depending on the location of the property, whether it is near the sea, with accessibility and all kinds of services that provide a good quality of life to future tenants.

"The main reason for this increase is that there is too much demand for so little supply due, among other factors, to the halt in public housing construction, the limited private supply, lack of land, or excessive bureaucracy. Therefore, all this "prevents enough construction to meet demand," comments María Matos, director of Studies and spokesperson for Fotocasa. "And between 1999 and 2013, 1.3 million subsidized housing units (VPO) were built. Before, 60,000 were built annually, and now only 9,000 are constructed each year."

Reviewing the last 10 years, as of August 2024, the average price has been set at 11.9 euros per square meter, a significant increase of 120.37% compared to 5.3 euros in the same month of 2014. Comparing with the last three years, rates have risen significantly since August 2021 when the square meter was almost 55% lower than this year, rising from 7.7 euros to 11.9 €/m², according to Idealista.

"What has most influenced the price increase has been "the transformation of the market due to the rise and fall of interest rates causing a rebound effect, which has fueled purchase demand that remains high due to supporting factors like a resilient job market and stronger wage increases," explains Matos. Additionally, housing prices are indirectly related to job supply because "previously they could work in any community, but now job opportunities are only concentrated in major capitals like Alicante, causing demand to concentrate and putting much more pressure on supply."

Diversifying the city map by zones shows an increase in rental prices from 2014 to 2024. This increase varies significantly by area, with particularly notable increases in Virgen del Remedio-Juan XXIII (128.5%) and Playa de San Juan (122.5%) in August.

Regarding annual growth, the group of neighborhoods that has grown the most in the past year includes Parque Avenidas-Vistahermosa (23.9%), Benalua and La Florida (14.9%), and Campoamor-Carolinas (10.1%), highlighting a recent increase in demand or improvements in these areas.

Furthermore, the areas with the highest rents are Playa de San Juan-El Cabo, which stands out with the highest average rent in 2024 at 13.8 €/m², followed by the city center at 12.0 €/m².