New Developments in Costa Blanca

The Costa Blanca, the "White Coast," shimmers with opportunity for real estate investors. Bathed in over 300 days of sunshine annually, this Mediterranean paradise stretches over 200 kilometers along the Alicante province in southeastern Spain, beckoning with its azure waters, picturesque villages, and vibrant culture. But beyond the idyllic landscape lies a robust and dynamic property market that has consistently attracted international buyers seeking a second home, retirement haven, or lucrative investment. The current state of the market is one of cautious optimism, marked by steady growth in prices and a continued strong demand, particularly from Northern European countries, including the UK, Netherlands, Belgium, and Scandinavia. While not experiencing the explosive boom of the pre-2008 era, the Costa Blanca's market demonstrates resilience fueled by its enduring appeal, relatively affordable prices compared to other Mediterranean hotspots, and the increasing desire for a healthy, outdoor lifestyle.

The region's popularity as a hub for international investment stems from several key factors. Firstly, the climate is a major draw, offering mild winters and warm summers, making it an attractive year-round destination. Secondly, accessibility is excellent with Alicante-Elche Miguel Hernández Airport serving as a major international gateway, connecting the Costa Blanca to numerous European cities with frequent and affordable flights. Thirdly, the quality of life is high, with excellent healthcare facilities, international schools, a thriving culinary scene, and a wide range of leisure activities, including golf, water sports, hiking, and cycling. Finally, the relative affordability of property compared to other Mediterranean locations like the French Riviera or Tuscany, makes the Costa Blanca an appealing choice for a diverse range of investors, from those seeking a modest apartment to those looking for a luxury villa. The strength of the British pound and other currencies against the Euro also plays a factor in certain demographic investments.

Market Trends and Prices

The Costa Blanca real estate market is currently experiencing a period of sustained, albeit moderate, price growth. While variations exist across different areas, the general trend points towards a gradual increase in property values, driven by strong demand and limited supply in certain prime locations. Areas closer to the coast and popular among foreign buyers, are naturally seeing higher price appreciation than more inland locations. The market is not uniform, and distinct differences exist between the North and South of the Costa Blanca, as well as between coastal and inland regions.

The northern Costa Blanca, encompassing areas like Jávea, Denia, and Moraira, tends to command higher prices than the south. This is largely due to the more rugged coastline, picturesque coves, charming towns with strict building regulations that have preserved their original character, and a generally more affluent clientele. The south, including areas like Torrevieja, Orihuela Costa, and Santa Pola, offers more affordable options, particularly in terms of apartments and townhouses. The landscape is flatter, the beaches are longer and sandier, and there is a wider range of modern developments.

Coastal properties, unsurprisingly, are generally more expensive than those located inland. Sea views, proximity to beaches, and easy access to amenities significantly increase property value. However, inland areas offer a more authentic Spanish experience, often with larger properties, greater privacy, and lower prices. They also appeal to those seeking a quieter lifestyle away from the tourist crowds.

What you get for your money on the Costa Blanca varies significantly depending on location, property type, and condition. For example:

• For €150,000 - €250,000: In the southern Costa Blanca, particularly around Torrevieja or Orihuela Costa, this budget could secure a modern two-bedroom apartment with a communal pool, within walking distance of the beach. Inland, in towns like Almoradí or Rojales, it could buy a larger townhouse with a small garden or a renovated older apartment.
• For €250,000 - €400,000: This budget opens up more options in both the north and south. In the north, around Calpe or Benissa, you might find a smaller villa with a private pool or a spacious apartment with sea views. In the south, you could purchase a larger villa with a bigger garden and pool, or a newly built townhouse in a gated community.
• For €400,000 - €750,000+: This budget allows you to acquire a substantial property in a prime location. In the north, around Jávea or Moraira, you could find a luxury villa with stunning sea views, a private pool, and beautifully landscaped gardens. In the south, you could purchase a modern, high-end villa with all the latest amenities.
• Over €750,000: The market is filled with luxury villas with panoramic views, expansive gardens and state-of-the-art facilities. These tend to be in the most sought after locations like Altea Hills and similar exclusive residential areas.

New Build vs Resale

The Costa Blanca real estate market presents buyers with a choice between new build properties and resale properties, each offering distinct advantages and disadvantages. Over the past few years, there has been a noticeable surge in new developments, driven by demand from foreign investors seeking modern homes with contemporary designs, energy-efficient features, and the latest technology.

New build properties often boast open-plan living spaces, sleek kitchens, integrated air conditioning and heating systems, and high-quality finishes. They are also typically built to the latest energy efficiency standards, resulting in lower utility bills and a smaller environmental footprint. Many new developments also include communal facilities such as swimming pools, gyms, and landscaped gardens.

Resale properties, on the other hand, offer a different kind of charm. They often feature traditional Spanish architecture, with features like terracotta tiles, wooden beams, and courtyards. Many resale properties offer renovation potential, allowing buyers to customize the property to their own tastes and preferences. Resale properties can also be found in established neighborhoods, often with mature gardens and a sense of community.

New builds are particularly popular with foreign investors for several reasons. Firstly, they offer a hassle-free buying experience, as the properties are typically sold off-plan, allowing buyers to secure their dream home before it is even built. Secondly, new builds often come with guarantees and warranties, providing peace of mind for buyers. Thirdly, new builds are often located in prime locations, close to amenities and attractions. Finally, the modern design and energy-efficient features of new builds are highly appealing to many foreign buyers. Furthermore, they don't have to worry about previous occupants or the history of the property.

Popular Locations for Investment

The Costa Blanca offers a diverse range of locations, each with its own unique character and appeal. Some areas are particularly well-suited for rental yields, while others are more attractive for luxury living. Emerging areas also offer the potential for future capital appreciation.

Top towns for rental yields:

• Torrevieja: This bustling coastal city offers a wide range of affordable apartments and townhouses, making it a popular destination for tourists. Rental yields are typically high, particularly during the peak summer season.
• Orihuela Costa: This coastal strip boasts numerous beaches, golf courses, and entertainment options, attracting a large number of visitors. Rental yields are generally good, especially for properties close to the beach.
• Benidorm: While sometimes overlooked, Benidorm is still a very attractive option for tourists looking for affordable accommodation. The city has a high volume of visitors and rental yields remain competitive.
• Alicante City: The city is a major tourist hub and boasts a wide range of attractions. The high demand for short-term rental apartments makes Alicante a viable location for investment.

Top towns for luxury living:

• Jávea: This charming coastal town is known for its beautiful beaches, stunning scenery, and upmarket atmosphere. It attracts a discerning clientele seeking luxury villas and apartments.
• Moraira: This picturesque village offers a tranquil and exclusive environment, with luxury villas nestled in the hills overlooking the Mediterranean Sea.
• Altea: Famous for its iconic blue-domed church, Altea is a beautiful town with a relaxed atmosphere and stunning views. It's an ideal location for luxury living with numerous high-end villas and apartments.
• Denia: This historic port town offers a blend of traditional charm and modern amenities. Denia is renowned for its Michelin-starred restaurants, yachting marina, and beautiful beaches.

Emerging areas:

• Finestrat: Located inland from Benidorm, Finestrat is experiencing a surge in new developments. The area offers stunning mountain views, easy access to the coast, and lower property prices than coastal locations.
• Ciudad Quesada: This established residential area offers a wide range of properties at affordable prices. It's a popular choice for expats seeking a relaxed lifestyle.
• Polop: Situated inland near La Nucia, Polop is a charming Spanish village with narrow streets, traditional houses, and a friendly atmosphere. It offers a more authentic Spanish experience at a lower cost.

Buying Process for Foreigners

The process of buying property in Spain as a foreigner is relatively straightforward, but it is important to be aware of the key steps involved.

• NIE (Número de Identificación de Extranjero): This is a tax identification number that is required for all foreigners buying property in Spain. It can be obtained from the local police station or the Spanish consulate in your home country.
• Bank Account: You will need to open a Spanish bank account to facilitate the purchase of the property and pay for ongoing expenses.
• Notary: The final step in the buying process is signing the title deed (escritura) in front of a notary public. The notary will verify the identity of the parties involved, ensure that all legal requirements have been met, and register the property in the Land Registry.

Golden Visa:

The Spanish Golden Visa program offers residency to non-EU citizens who invest a minimum of €500,000 in real estate. This visa allows the holder to live and work in Spain, and it can lead to permanent residency and citizenship.

Taxes and Fees:

• ITP (Impuesto de Transmisiones Patrimoniales): This is a transfer tax that is payable on resale properties. The rate varies depending on the region, but it is typically around 8-10% of the purchase price.
• IVA (Impuesto sobre el Valor Añadido): This is a value-added tax that is payable on new build properties. The rate is currently 10% of the purchase price.
• Notary Fees: These fees are payable to the notary for their services in preparing and registering the title deed.
• Legal Fees: It is advisable to hire a lawyer to assist with the purchase process. Legal fees typically range from 1% to 2% of the purchase price.

Rental Potential

The Costa Blanca offers excellent rental potential, both for tourist rentals during the summer months and for long-term winter rentals catering to "snowbirds" seeking a warmer climate.

The tourist rental market is particularly strong during the summer peak season, from June to September. Demand is high for apartments and villas close to the beach, with many properties achieving occupancy rates of 80% or higher. Rental income can be significant during this period, particularly for well-located and well-maintained properties.

Long-term winter rentals are also popular on the Costa Blanca, particularly among retirees and snowbirds from Northern Europe. These renters typically seek furnished apartments or villas for periods of several months, from October to May. Rental income from long-term winter rentals can provide a steady stream of income throughout the off-season.

Legal Requirements for Holiday Rentals:

In recent years, the Spanish authorities have introduced stricter regulations for holiday rentals. Owners are required to register their properties with the local tourist board and obtain a tourist license. Failure to comply with these regulations can result in fines. It is important to seek professional advice to ensure that your property meets all the necessary legal requirements for holiday rentals.