Will Property Prices on Costa Blanca Rise in 2025 and 2026?

‍Costa Blanca on the rise – In recent years, the property market on Costa Blanca (Alicante province, including Torrevieja, Orihuela Costa, Guardamar) has shown impressive price increases, especially in the primary market (new development projects). By 2023, average prices in Spain had surpassed pre-global financial crisis levels from 2008, with the Valencia region (including Costa Blanca) being one of the fastest rising – recording a +7.9% year-on-year price increase in 2024, second only to the Balearics. All indications suggest that the upward trend will continue in 2025-2026, although the pace may slow slightly. Below, we present a mini-market analysis – current data, forecasts, and factors influencing prices – to help buyers from Poland assess whether it is a good time to invest in a new property on Costa Blanca.

Dynamic Price Growth in 2023-2024

2024 brought an acceleration in price growth on Costa Blanca, despite a slight decrease in the number of transactions. According to Tinsa data, at the end of Q1 2024, the average property price in Alicante province was around €1,453 per m², representing a +7.8% year-on-year – more than double the average in Spain (+3.3%). During the same period, apartment sales decreased, but demand on the coast kept prices on an upward trajectory. On Costa Blanca, property prices increased by an average of 9.2% year-on-year (Q2 2024), even though the number of transactions was lower than the previous year. In other words, lower supply did not halt price growth, and the market remained very resilient to the slowdown.

In popular tourist towns in the region, double-digit price jumps were even recorded. For example, Orihuela (including coastal Orihuela Costa) increased by 11.3% year-on-year, and Torrevieja by 9.2% year-on-year (Q1 2024). The double-digit price growth indicates exceptionally strong demand – especially for new apartments and villas in attractive locations. There is a noticeable divide: regions focused on foreign buyers and second homes (like Costa Blanca) maintain high price growth, while areas primarily dependent on local buyers have felt a more negative impact from rising interest rates. As Cristina Arias from Tinsa emphasizes, wealthy foreign buyers seeking holiday homes are less sensitive to inflation and higher credit costs, so they continue to make transactions, driving up prices in resorts.

New investments drive the primary market. Costa Blanca enjoys the status of being the second largest property market in Spain in terms of transaction share (16.4% of the national market in Q2 2024). Particularly, the primary market is developing dynamically here – sales of new homes in the Alicante region increased by 13.4% year-on-year (Q2 2024), surpassing growth in the secondary market. This trend is also visible across Spain: in 2024, the number of transactions for new apartments increased by as much as +21.6% year-on-year, while sales of used properties rose by about 6.4%. Buyers prefer new developments due to their modern standards, energy efficiency, and amenities – even if it means a higher price per m². Importantly, prices for new homes have risen faster than for used ones – in Q4 2024, prices for developer apartments in Spain were ~12% higher than the previous year, slightly outpacing the price growth of second-hand properties.

Will the upward trend continue in 2025 and 2026?

Experts' forecasts for the coming years are moderately optimistic. Most analyses indicate that property prices will continue to rise in 2025, although the growth rate may calm down a bit. Fitch Ratings predicts a price increase for Spain of +6% to +8% in 2025, emphasizing that the housing market “shows no signs of cooling” despite concerns about investments and supply shortages. Meanwhile, BBVA bank in its latest report estimates a price increase of +7.3% in 2025 and another +5.3% in 2026. These forecasts are based on the assumption of sustained demand and limited supply, as well as better macroeconomic conditions in Spain.

Importantly for the Costa Blanca region, price increases in Comunidad Valenciana (Valencia region) are among the highest in the country. In 2024, prices in this region rose by an average of ~7.9%, faster than the national average. Therefore, it can be expected that Costa Blanca will continue to perform above average, especially considering the unwavering interest from foreign buyers in seaside properties. BBVA analysts point to “reviving foreign demand” and the gradual easing of monetary policy (a decrease in interest rates) as factors that will sustain buyer activity and further price increases. In other words, buyers are returning to the market – and buying on a large scale, which translates into a projected increase in the number of transactions in 2025 of up to +9% (to ~780,000 sales across Spain).

It is worth noting that financial institutions have also updated their forecasts positively. For example, CaixaBank Research raised its forecast for the MIVAU housing price index to +5.9% in 2025 (vs. a previous 3.6%), and according to the INE transaction index, prices could rise by as much as ~7.2% nationwide. In summary, the market consensus assumes further price increases in 2025 and a high probability of continuing the trend in 2026, although perhaps at a slightly slower pace (around 4–6% per year). There are no signs of price declines, rather stable growth supported by demand fundamentals.

What influences property prices on Costa Blanca?

To understand why prices continue to rise and are likely to keep rising, it is worth looking at key market and macroeconomic factors. Costa Blanca has its specific conditions that make the primary market in the region very dynamic:

• Limited supply of new properties: Recently, the pace of construction of new development projects has decreased, creating a gap between demand and supply. In the first half of 2024, the number of new constructions started in Alicante province decreased by -33% compared to the previous year. Solvia (a major real estate intermediary in Spain) emphasizes that supply is not keeping up with demand, especially in the primary market, and this shortage drives prices up and creates availability issues for housing. In short, too few new homes are being built relative to demand, which naturally puts pressure on existing offers to increase prices.
• Demand driven by foreign buyers: Costa Blanca has been attracting buyers from all over Europe (including the UK, Scandinavia, Poland, Belgium) for years. These foreign clients often have greater purchasing power and are willing to pay more for their dream property by the Mediterranean Sea. According to Fitch agency, the increased influx of foreign buyers – willing to pay above local rates – contributes to price increases. In tourist areas, where purchases of “second homes” dominate, the decisions of wealthy investors have not been hampered by inflation or higher interest rates. This explains why Costa Blanca resorts are experiencing such impressive price increases – international demand compensates for weaker local activity.
• Macroeconomic and financial factors: The Spanish economy shows resilience, and forecasts suggest further GDP growth (around +2% in 2025). The labor market is solid, unemployment is falling, and household incomes are rising. Furthermore, it is expected that the European Central Bank's policy will ease – gradual decreases in interest rates are possible in 2025, which will improve the availability of mortgages. By the end of 2024, a revival in lending was already recorded: the number of new mortgages granted in Spain increased by +19% year-on-year. Better financing availability and the prospect of cheaper credit encourage more buyers to enter the market, sustaining demand despite rising prices.
• High inflation of construction costs: Although overall inflation in Spain has started to stabilize, in recent years construction material and labor costs have soared. Developers are facing higher land, labor, and raw material costs, which translates into higher prices for new apartments. As a result, prices in the primary market must account for these rising costs, and some projects have been postponed. This further limits supply – fewer profitable investments are coming to market, and those that are being realized have higher asking prices, which keeps the median prices high.
• Infrastructure and attractiveness of the region: Costa Blanca continuously invests in its infrastructure and tourist appeal. The expansion of express roads, improvement of tourist facilities, maintaining Blue Flag status on dozens of beaches – all of this increases the value of the location. The Alicante region received the most Blue Flag awards in Spain in 2024 (86 flags on 69 beaches and 17 marinas), which raises the prestige of the area. High quality of life, sunny climate, and good communication (international airport in Alicante, toll-free highways since 2020) ensure that demand for properties here remains strong. For buyers, this means that Costa Blanca will continue to be desirable as a location – both for living and for holiday rental investments – which naturally influences the sustaining of the upward price trend.

What does this mean for buyers? – Summary and forecast

In summary: prices for new properties on Costa Blanca are likely to rise in both 2025 and 2026, although after a period of very dynamic increases (around 8–12% per year), a somewhat calmer pace is possible. However, all data indicates a continuation of the upward trend, driven by limited supply and strong demand (especially international). Even in real terms (after accounting for inflation), further increases in property values are forecasted. For buyers from Poland, this means that delaying a decision may result in higher prices in the future – especially in the primary market, where attractive offers are quickly diminishing.

On the other hand, investment prospects remain promising. The Costa Blanca market shows stability and resilience; even in the face of global turmoil, it maintains growth, making it a relatively safe haven for capital. Rental prices are also rising (in Spain faster than sales prices), which means good potential returns on rental investments. Experts' tone is moderately optimistic – there are no signs of a bubble, rather a healthy growth based on real demand and supply shortages. As Solvia put it: “the mismatch of demand and supply continues to drive up property prices”, and Fitch adds that the market “shows no signs of cooling”.

If you are considering purchasing a property on Costa Blanca, the primary market offers many modern investments, but the best opportunities disappear quickly. This is still a good time to find your dream home in Spain before further price increases. We invite you to browse current offers of new properties on Costa Blanca on our website and to contact Horizon Properties – we will be happy to help you find the best deals in the primary market in this region before prices go even higher.

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