House prices in Alicante – October 2020

We update the prices of housing in Alicante for this October 2020.

Are house prices falling in Alicante? Yes. Is it a real drop? Not so much. Let's look at the data.

We have several reference indices, the reports from the notary association, the appraisals registered by the Ministry of Transport, Mobility and the Urban Agenda, our data and tinsa, appraisers.

Following Tinsa, we see that in the third quarter of 2020 there was a year-on-year growth of 2,9% in the price of housing with respect to the previous year, with the average price in the city at €1.305 the square meter compared to €1.268 per square meter in the third quarter of 2019. Come on, despite the covid crisis, the price of housing in Alicante has continued to grow compared to 2019.

Price m2 Alicante October 2020
Price m2 Alicante, third quarter 2020. Source: TINSA

Idealistic, the upper graph, which works with the publication prices of the houses, registers the same behavior, let us not forget that the sale price to the public and the appraisal price do not usually coincide, but it does match the trend.

This statement is partially true. Alicante has experienced a very strong growth in the price per square meterIn reality, prices had started to rise strongly since December, the covid-19 has meant a significant readjustment.

Evolution of housing prices by neighborhoods

El price increase which began in December 2019 and the home price adjustment caused by covid-19. Notwithstanding the foregoing, prices have increased in relation to 2019.

What the experts think about the price of housing

Bankinter has made a preliminary estimate, in which it considers that total sales will fall by 35%, out of the 326.000 operations of buy and sell, taking us to the minimum levels registered in the period 2012-2014.

After falling 25% in the first half of the year and 40% since the virus began in March, Bankinter points out that the number of operations will continue to be low in the coming quarters in an environment of still high economic uncertainty and due to the widening of the range between sale and purchase prices.

In this situation, in addition to the economic uncertaintyTwo factors come together. On the one hand the seller has not yet been forced to lower prices (due to the still short duration of the crisis, the hope of a quick recovery and the help offered by banks for mortgage payments). On the other hand, the buyer is waiting for succulent discounts, which may not arrive.

And it is that the market is not in the same conditions as in 2008, the banks are still capitalized, unemployment is not registered after the 2007 crisis and there is no real estate bubble.

What can I do with this data?

If you would like to buy a house it is a good moment, since the market is correcting the prices downwards. Sell  It is also an interesting option, since many owners still do not dare to lower their prices, and whoever places themselves at a competitive price will be able to sell before the situation worsens in 2021. In any case, for those investors It is a very interesting opportunity to intervene in the Alicante real estate market, and for them we have designed the comprehensive rental management, so they can delegate the management of their assets and focus their energies on new investments.

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