Valencia's real estate market is in the spotlight for national and international investors. This is confirmed by the growing demand arising from the improvement in the economy, the favourable financing conditions, the high profitability offered by rental sector and the reactivation of new residential projects.
These factors have set a positive stage for the real estate sector which, in 2017, will consolidate its recovery and maintain the upward trend with new constructions and building renovations as main incentives. This is one of the conclusions drawn up from the Valencia Market Report 2017 prepared by Engel & Völkers, which also confirms that "until now the normalisation of the sector had occurred unequally from the geographical point of view, one of the characteristics planned for this year is the the increase in sales and prices in most cities."
Miguel Ángel Cantos, director of the Metropolitan Market Centre (MMC) at Engel & Völkers in Valencia, confirms that "we have started 2017 with a generalised increase in the average price, up 4.6% on 2015, however, this is still 46% below the pre-crisis years."
Strong contrasts between districts
Valencia presents very attractive prices with respect to the real estate investments in other big cities. However, the contrast between the different districts of the city is enormous as well as the year-on-year variations recorded in the previous year.
As an example, the 11% and 10% increases experienced in Algirós and Cuatro Carreres, respectively, or the 6.5% increase registered in the last quarter of 2016 in Poblats Maritims contrast with the price drop of 5.8% recorded at the end of the year in Eixample.
The explanation for these differences is due to the shift of demand to the areas closest to the old Turia river and to the beach, which has intensified the gap between the different districts of the city.
Thus, the Ciudad de las Ciencias or the City of Sciences and Alboraya-Patacona are added to the prime areas of the city next to central Eixample, Ciutat Vella and Pla del Real, areas where prices have reached above 3,500 euros / sqm and where large flats with views or in stately buildings are the most sought-after properties.
Regarding the profile of the buyer, it must be said that the strong increase in the number of international clients registered in the last year made up 40% of the sales. The nationalities of foreigners who invest in Valencia are mainly German, Italian, British and French.
The rental market takes off in full force
Following the 4% price hike last year, the rental market boom in Valencia will see an even greater increase for 2017 which could be between 5% and 10%. A rise that will be uneven between districts and will not happen for unrenovated homes.
In Valencia, Engel & Völkers focuses its rental operations in the most sought-after districts of the city such as Eixample and Colón Market as these areas maintain the interest of tenants who are looking for penthouses in the most fashionable neighbourhoods.
The nationality of the tenants has changed drastically in the last year. When comparing the national profile with international clients, foreigners make up 54% of the rentals led by French, Americans, Italians and British.
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