The province of Alicante: profitable investments in housing in Spain.

In a context of economic uncertainty and rising interest rates that affect different regions of Spain, Alicante is becoming a stable and profitable fairway in the real estate market. Thus, the province already represents more than 50% of sales transactions in the Commune of Valencia, becoming an attractive destination for investors from all over the Iberian Peninsula and the world who are looking for opportunities to multiply their funds. Several factors are behind this growth, including a broad and stable demand for real estate in the province, affordable real estate prices and high yields for investors, exceeding 9% in some Alicante cities such as Elda or Alcoy. Thanks to all this, the province can offer investors to cope with rising interest rates, increasing mortgage costs and low returns from investing in bank deposits, which currently do not offer high yields.

Julián de la Peña, president of INMOADAL and member of ASICVAL, notes:

"this year has been incredible", pointing to the significant increase in demand and the conclusion of transactions. He states that finding investors in the Province of Alicante is becoming increasingly diverse, from professionals with years of experience to those who want to start investing, starting with their residential property.

He also notes: "When you are looking for a profit in a real estate purchase, you need to factor in the costs to understand what income you will get from the transaction. For example, if a person invests €300,000 in a property, he knows he can rent it out for no more than €1,500. However, if the same person buys a house for 80,000 euros, he can rent it out for 700 euros, and the return from such a transaction will be very high," says de la Peña.

The Alicante market, according to de la Peña, has experienced an increase in sales of properties with a maximum price of 110,000 euros, especially where they can be rented out. This indicates a shift in preference towards more affordable properties with yields 8% higher than the national average. The key for investors is to find a balance between investment and yield, taking into account costs and personal preferences.

The interest in the province of Alicante for residential investment is considerable and this has been evident this year. However, not all areas are equally lucrative. The leaders of the province are Elda and Alcoy, which are among the most profitable areas to invest up to 80,000 euros, providing, in some cases, returns of more than 9%, according to the latest Masteos report published by Idealista. In Elda, the return on real estate for investors reaches the highest in the country at 11.14%, while Alcoi ranks third with a return of 9.60%, second only to Talavera de la Reina.

"Although Elda is still a cheap area compared to other zones in the province, a year ago you could find investment opportunities here for 18,000 euros that have now disappeared," says Juani Cabrera of the Cazorla agency in Elda. He notes that investors are looking for properties that are old or in need of renovation with the aim of renting them out for 400 or 450 euros a month. "They want properties costing less than €60,000 that don't need a lot of renovation. We have a lot of demand for rentals because of the hospital in the city and the doctors, nurses and residents who have come here to work and want to live in good conditions."

Also of note is the arrival of investors from Madrid and other regions, as well as foreign investors from Colombia, New York, Argentina and Mexico.

The real estate market in the province, especially in Alicante and San Vicente del Raspeig, is also attracting attention using data provided by Idealista for residential investments not exceeding 120,000 euros. San Vicente del Raspeig, according to this report, provides a return of 7.65%, while investments in Alicante achieve a 6% return. According to experts, most buyers in San Vicente del Raspeig are investors looking for alternatives to traditional investments. Although supply is limited, those with savings prefer to invest in properties ranging from €150,000 to more affordable options around €90,000. Most investors are looking for high returns by renting these apartments to university students and also prefer a location close to the University of Alicante or Lo Torrent Park.

With regard to Alicante, Juanjo Fernandez of Alicante real estateagency notes an increase in the number of foreign investors, but points to a significant obstacle for seasonal rentals due to the strict regulation in Alicante. The difficulty of obtaining tourist licenses limits the returns on such investments, although properties intended for long-term rentals are still attractive to local and foreign investors. Fernandez also notes the attractiveness of Alicante to foreigners, especially those looking to retire in a city with many hours of sunshine a year. Despite the current uncertainty, the real estate market in Alicante remains stable, with many areas such as Pla Carolinas offering attractive yields of up to 9% in some cases.

In the tourist gem of Benidorm, Juan Belastegui, head of a real estateagency in the city, says that although homes priced below €150,000 are in high demand, the market is shrinking significantly above this figure. Benidorm is still considered a sound investment, especially for investors with high solvent demand who are looking for long-term returns, and the Rincon de Loix area stands out for its high yields and attractive price.