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Alicante, the jewel of the Costa Blanca, has long been known for its picturesque Postiguet beach, the majestic Santa Barbara Castle and the lively Esplanade promenade. In recent years, however, this Spanish city has become much more than a popular tourist destination – it is a rising real estate market in Spain, offering excellent opportunities for investors looking for affordable yet promising properties in Alicante. For those interested in cheap property in Spain in promising investment areas, Alicante deserves special consideration.
Why is Alicante a rising market?
- Strategic location and accessibility:
- International Airport: Alicante has one of the busiest airports in Spain(Alicante-Elche Miguel Hernández Airport), which provides excellent connections to the whole of Europe and attracts a constant flow of tourists and expats.
- Transport: well-developed road and rail network, including high-speed trains to Madrid and Valencia. The port is an important cruise centre.
- Costa Blanca: Located in the heart of the Costa Blanca, one of the most popular coastal areas in Spain.
- Excellent climate and quality of life:
- 320 days of sunshine: Alicante enjoys over 320 days of sunshine per year, which provides favourable conditions for year-round enjoyment of the property.
- Mediterranean lifestyle: a combination of city amenities and relaxing beach atmosphere, delicious cuisine and rich culture.
- Affordable cost of living: compared to other major Spanish cities or European capitals, Alicante offers a relatively affordable cost of living.
- Economic development and tourism:
- Growing tourism: the city has seen a steady increase in tourist flow, which has stimulated the short-term rental market.
- Business and education: Alicante is an important commercial and business centre, home to the University of Alicante, which attracts students and young professionals, supporting the long-term rental market.
- Potential for capital appreciation:
- Although prices in Alicante are still lower than in Madrid or Barcelona, they have shown steady growth in recent years, making it a promising investment area.
Property types and investment areas in Alicante
The property market in Alicante is diverse and offers opportunities for different types of investors:
- City Centre (Centro / Ensanche):
- Characteristics: located between the port and the castle, with trendy shops, restaurants, bars and proximity to Postiguet beach. Here you will find mostly apartments.
- Prices: higher than the city average, but still more affordable than other major cities. Prices per square meter range between €1,800 – €2,500+.
- Investment potential: High for short-term (tourist) and long-term (students/young professionals) rentals.
- Garbinet/Carolinas (Garbinet/Carolinas Altas/Carolinas Bajas):
- Features: Residential neighborhoods located north of downtown offering more affordable prices. Here you will find local residents, schools and shopping. Good transport connectivity to downtown and the beach.
- Prices: one of the most affordable in the city, between €1,000 – €1,500 per sqm. Cheap properties can be found in Spain – apartments for €70,000 – €150,000, often in need of refreshing.
- Investment Potential: Suitable for long term rental to local families or students, offering a stable, albeit lower, yield.
- San Juan Beach (Playa de San Juan):
- Features: the most popular and modern beach of Alicante, known for its wide sandy strip and modern residential complexes. Located north of the centre, with excellent tram connections.
- Prices: significantly higher than in the city centre, ranging from €2,500 – €4,000+ per sqm, especially for properties with sea views or in new developments.
- Investment Potential: High for short term (tourist) rentals during the summer season, but also for long term rentals for families looking for quality living near the beach.
- El Campello / Muchavista:
- Features: Located north of San Juan Beach, these areas offer a more relaxed atmosphere but still with access to the beach and tram line. Larger properties and villas.
- Prices: more reasonable than San Juan Beach, ranging from €1,800 – €3,000 per sqm for apartments and higher for villas.
- Investment Potential: Suitable for seasonal rental and for those looking for a larger property.
Investment potential and profitability
Alicante offers attractive potential for investors:
- Rental yield: The average gross rental yield for properties in Alicante can vary between 4% and 7% per annum, depending on location and rental type (long/short term). In central areas or near the beach, short-term rentals can provide higher income.
- Capital appreciation: the city has enjoyed steady price growth, with experts predicting a continuation of this trend, making property in Alicante a good long-term investment.
Important considerations for investors
- Additional costs: always allow 10-15% of the purchase price for taxes (ITP or VAT + AHT), notary fees, lawyers’ fees and commissions.
- NIE number and bank account: It is compulsory to get a NIE number and open a Spanish bank account.
- Professional help: you must hire an independent Spanish lawyer to carry out a thorough legal inspection of the property and protect your interests.
- Property management: if you are going to rent out the property, consider hiring a local management company, especially for short-term rentals.
Conclusion
Alicante is undoubtedly a rising real estate market in Spain, offering an exceptional combination of affordable prices, high quality of life and solid investment potential. For those looking for cheap property in Spain in dynamic investment areas, this Costa Blanca city presents an excellent opportunity. With the right research and expert help, investing in property in Alicante could prove to be one of the best decisions in your portfolio.
