In Arena Projects we have conducted a study on the relationship between demographics and the real estate market is essential to understand the dynamics of housing supply and demand. In Spain, economic and socio-demographic factors have significantly boosted housing demand, especially from the second half of the 1990s until the preamble to the financial crisis in 2007. During this period, the Spanish real estate market experienced a remarkable boom, characterized by a significant increase in housing construction and a considerable rise in prices. In 2006, the construction sector accounted for 12.6% of GDP and 13.1% of total employment. This growth was reflected in an increase in housing prices in relation to household income, which forced many families to resort to external financing and contributed to the revaluation of real estate assets.
Demographics and Housing in the Marina Alta
The Marina Alta, a region located in the province of Alicante, reflects well this relationship between demographics and real estate. According to recent data from the National Institute of Statistics (INE), the population of the Marina Alta has shown a remarkable growth in recent decades, driven by both the increase in life expectancy and immigration. In 2024, life expectancy in Spain is 84 years, one of the highest in Europe. Migration has also had a significant impact on the region’s demographics. During the first decade of the 21st century, immigration responded to the labor market effect, altering the growth trend of the Spanish population. This has influenced new household formation and housing demand.
Economic and Demographic Impact on Housing Demand
The demand for housing is closely linked to demographic dynamics. The formation of new households, often conditioned by the availability of housing, directly affects the housing market. In addition, the aging of the population, with an increasing proportion of older people living longer, influences the demand for different types of housing. In the Marina Alta, the demand for housing is also affected by tourism and second homes, factors that intensify construction and price increases. The presence of an older population seeking retirement residences, coupled with the demand for high quality real estate from tourists and expatriates, drives real estate activity.
Conclusions
The relationship between demographics and real estate is complex and multifaceted. In the Marina Alta, as in the rest of Spain, population growth, immigration and the aging of the population are key factors driving the demand for housing. The availability of demographic data, such as that provided by censuses, is essential for planning and responding adequately to the needs of the real estate market. Studying this interrelationship provides valuable insights into understanding how changes in population affect the housing market and vice versa. The application of econometric techniques, such as cointegration analysis, helps to identify and model these relationships, providing a solid basis for decision making in real estate and urban planning.
Inhabitants by population of the Marina Alta 2023.
- DENIA 45,983
- XABIA 30,249
- ELS POBLETS 2,749
- VERGEL 5,160
- ONDARA 7,323
- PEDREGUER 8,570
- GATA 6,581
- TEULADA 12,619
- BENISSA 12,372
- CALPE 25,909
