Alicante: the province conquering Spain's luxury market amid a slump in the housing market.

The average cost of luxury housing in Alicante exceeds 2 million euros. The traditional residential real estate market is experiencing a decline in Spain. Last year there were 12% fewer transactions. Among the reasons - inflation, loss of purchasing power of households and rising interest rates.

However, this decline does not seem to affect a parallel luxury housing market that is on a big upswing: the luxury market. All 50 Spanish provinces have at least one home worth more than a million euros listed on Idealista, but the distribution is very uneven. The provinces of Malaga, Balearic Islands, Madrid and Barcelona concentrate 70% of all available properties over that amount. But now Alicante is quickly and rapidly taking the market away from them: Alicante. Research.

Spain has, quietly and quietly, become the fourth place in the world and the number one destination for luxury real estate investment. And in Alicante, this market has been growing at a rate of 25% per year for the past three years, as data from the Tecnitasa Group's Luxury Housing Survey in Spain shows. Yes, Alicante is in full swing as a new destination for the wealthiest buyers, who are increasingly buying luxury, ultra-luxury and premium homes on the Blanca Coast.

In particular, the average value of premium housing in the province of Alicante already exceeds 2 million euros. An important fact when you consider that ten years ago transactions of this size were more than exceptional in the province. Why? Some of its attractive features are more than obvious: the Mediterranean area offers good connections, sun and beach, more affordable prices compared to Madrid or Barcelona, and spectacular views due to the mountainous terrain. In addition, the area is also characterized by good security, quality of life and air links.

On the other hand, another phenomenon that seems to support this luxury business is the proliferation of foreignreal estate agencies in the area, which make these properties visible outside of Spain. "They have the opportunity to build housing with great views of the sea and mountains, which is highly sought after by a certain segment of the foreign market," explained José Joaquín Gómez Campos, representative of Tecnitasa in Alicante and one of the authors of the study.

Prices?

However, the highest cost of housing in general is in Xàbia, with an average price of €2,666,278. The reason for this is that housing in this area is of a larger size than in a larger city such as Alicante. In the case of Finestrat, the average price is around 2,298,159 euros on average, 4,835 euros per square meter. And the price exceeds two million euros also in Teulada (2,095,254 with 4,686 euros per square meter) and in Calpe (2,015,861, 4,980).

Who buys them? The most popular product in the province of Alicante is detached houses with great views. And the potential buyers are usually Europeans (Germans, Brits, Swedes, Russians and Swiss) between the ages of 40 and 60. They tend to be high-ranking executives holding important positions in companies in their countries of origin and are looking for a second home to spend their vacations in. "85% or more of the transactions we close do not require a mortgage, and for the few that do finance the purchase, the increase in interest rates does not affect them as much as a middle-class family," pointed out Costa Blanca Sotheby's International Realty head Juan Torregrosa.

In addition, there is a trend that stems from this phenomenon. The luxury real estate market is positioned to drive the rest of the overall market. As mentioned earlier, while transactions in the traditional market fell by 12.1% last year, transactions in the luxury market rose by 55%. Investment in Spain is still coming, but not from Spaniards. And especially not from the middle class.