Lorraine Williamson
Costa Blanca housing costs are becoming one of Spain’s quietest affordability shocks. Not because Benidorm or Torrevieja have suddenly become more expensive than Madrid or Barcelona by square metre. They haven’t. The problem is that local wages don’t match the pace of the market — and the maths for ordinary buyers is starting to look brutal.
New figures from Tinsa’s “municipios relevantes” study put Benidorm and Torrevieja among Spain’s most pressured places to buy. The “theoretical purchase effort” — the share of household income needed for mortgage payments — is reported at 63% in both towns, far above the 35% level commonly treated as the upper bound of “reasonable” affordability.
That headline is easy to misread. People assume the big cities must be worse. But the Costa Blanca has created a different kind of squeeze: holiday demand pushing prices up, with local salaries stuck in a lower gear.
The myth of “cheaper than the big cities”
Benidorm’s average price cited in local reporting is roughly €2,398 per square metre, with a sharp year-on-year rise, which still looks modest next to the sticker prices of Madrid and Barcelona.
But affordability is not about the sticker price alone. It’s about what a typical household earns where the home is. When the labour market is dominated by tourism and service work, pay levels tend to lag behind major capitals — and that’s how a “cheaper” market can become harder to live in.
Why the Costa Blanca is under pressure
The Costa Blanca has long been a magnet for second homes and holiday lets, and foreign demand remains a huge part of the story. CaixaBank Research has described Alicante as Spain’s leading province for foreign buyers, with foreigners accounting for around half of sales, and a large share of those buyers being non-residents.
Regional reporting echoes the scale of that international pull. One Cadena SER report citing registry and market sources put foreign purchases in Alicante province at around 43–44% in early 2025, concentrated heavily in coastal municipalities such as Torrevieja and Orihuela.
Put simply, local families are competing in a market shaped by buyers whose budgets are often set by salaries and savings elsewhere.
The warning sign is the “effort rate”
Tinsa’s data shows the stress is not isolated. A quarter of the municipalities it studied had purchase-effort rates above the 35% “reasonable” level, and the most critical cases were concentrated in coastal areas of Málaga, Alicante and Cádiz.
This matters because once households are forced into paying well above that benchmark, the margin for everything else shrinks fast: childcare, fuel, food, energy bills, and the cost surprises that turn a tight budget into a crisis.
What this means for residents, not investors
For many buyers, this isn’t a debate about lifestyle. It’s about whether it is still possible to buy a primary home near where you work. When the market tilts toward short-stay demand and second-home ownership, the housing that remains for year-round living becomes scarcer and more expensive.
That dynamic can reshape towns in slow motion. Schools lose families. Commuting distances grow. Key workers get priced out. And the place that looks “affordable” on a national chart becomes unaffordable on a local payslip.
The bigger question hanging over Benidorm and Torrevieja
The headline comparison with Madrid and Barcelona is useful because it jolts readers into seeing what’s changed on the coast. But the deeper story is about a structural mismatch: prices rising on global demand, with wages anchored in a local economy.
Unless supply expands meaningfully, or tourist-driven pressure eases, the Costa Blanca risks turning into a market where owning a home is increasingly reserved for outsiders and higher earners — while the people who keep the towns running are left chasing rentals, sharing homes, or leaving altogether.