According to the latest Tinsa Housing in Costa 2023 report, the profile of the typical property buyer in the Valencia region has undergone a considerable change in recent months. In all three provinces of the region, Alicante, Valencia and Castellón, there is a significant growth in investors from Ukraine, and buyers from the United Kingdom are once again returning to higher levels following the nervousness around Brexit.
The study is a detailed analysis of the second home housing segment on the different coasts of Spain. It is a segment with a high presence on the country’s coast and with a direct relationship with tourism and an influence on local real estate dynamics. Data necessary to understand the residential market as a whole.
In the Valencian Community the volume of residential sales has grown among non-resident foreign applicants. In the country they have intensified these purchases in 2022, especially on islands and the Valencia Community. In addition, developer activity in coastal municipalities recovers to 2019 levels. These are the common data in the three provinces of the autonomous community, but each of them, Alicante, Valencia and Castelló, have their own data highlighted by the Tinsa technical team.
On the Costa Blanca, in Alicante, the trend is upward and there are some cases of stability in the prices of the coastal municipalities, with an intense reactivation in sales, although a moderate contraction in visas. In this case, the demand profile is mostly international and comes from the United Kingdom, -which is recovering more of its market after the years of anxiety due to Brexit- France, Germany, central Europe and Scandinavia, as well as Russia and Ukraine. However, it should be noted from the Tinsa technical team that the presence of people of Russian nationality is decreasing on the coast, although Ukrainians have grown. Meanwhile, national buyers come from Madrid, the Basque Country or neighbouring communities such as Castilla-La Mancha. In all cases, the purchase for the purpose of own use predominates, rather than rental, for example.
On the Costa Blanca, the price of holiday homes on the coast is maintained and is “notably higher than the average price”. The average is 1,700 euro per square metre between Dénia and Benissa, 2,200 euro per square metre between Calp and Santa Pola and 2,100 euro per square metre between Guardamar del Segura and Pilar de la Horadada. Meanwhile, the general average value of housing in the Alicante coast municipalities of 1,533 euro per square metre and that of the entire province, of 1,348 euro per square metre.
Likewise, the coastal real estate market is a great weight for the province, concentrating 72% of sales and 69% of visas. The year 2022 was one of intense reactivation and of exceeding previous levels. Of course, the development activity contracted in a moderate although continuous trend since 2017. Alicante is the fourth provincial coastline with the most visas behind Malaga, Barcelona and the Balearic Islands.
In the Valencian Community, as in the rest of the country’s coastal areas, the upward trend in holiday home prices contrasts with a usual residential market context that tends to stabilise. This trend towards normality is not yet reflected on the coast.
From the Tinsa team they attribute it to the fact that purchases by foreigners and the profile of a second-home buyer has a higher-than-average purchasing power, less affected by the impact of inflation or the rise in mortgages. They have more savings to face payments with their own resources.
They have also highlighted that in 2022 there has been a very notable increase in foreign sales, with particular intensity of non-residents and that in the first quarter of 2023 transactions will also begin to be released from resident foreigners.
In this way, developer activity reaches 2019 levels, especially on islands and the Community, although there is a lack of land in some stressed areas. In this sense, no price falls are expected in holiday homes.
