That was expected for a while already, a good signing for Real. He's still in his prime years, can cover multiple positions and is a technically amazing player that will fit in well into their team.
It was mentioned that he will earn over 10 mil. euro which puts him among the top paid defenders in the world. Well deserved, but a bit too high because a half of that contract will still be valid when he crosses 30.
Real will probably lose Ramos now, it would be hard paying both of them and going for an attacker as well.
From what I have seen a lot of defenders have a good salaries even if they are over 30 years old a good example there is when Bonucci was over 30 years old and he has a 7.5 Million salary another one is Thiago Silva where he earns 12 Million Euros when he was around 33 years old. I'm guessing that there is a higher age limit for defenders as they have different set of skills that they still have even though they are over 30 years old, people even say that some of them don't even end their prime not until they are 33. Overall Alaba is still young considering that he is 28 and he is in his prime years.