Valencia Property Third Quarter Price Report 2018

The good people at Pisos.com have brought out their latest quarterly property price report for Spain and it makes interesting reading. You can see the whole report here. For those of you who don't read Spanish or just want to know about Valencia Property Prices and trends we have picked out the information for Valencia and have some comments on it below. [caption id="attachment_5272" align="aligncenter" width="750"]Valencia Property Prices Third Quarter Report Valencia Property Prices Third Quarter Report[/caption] Firstly though a few reminders about the "methodology". It's not definitive, there is never anything definitive in the Spanish property price reports. There are various reports that come out each quarter or annually. The report of the property registry gives figures on completed sales but doesn't include that great incognito "black money". There is less black money these days meaning prices look to be rising faster than they are compared with previously declared prices. Similarly the report from the Spanish Notaries gives the same details but comes to a totally different conclusion and forever more that will confuse me. The various property portals such as Pisos.com, Idealista and Fotocasa give their reports based on asking prices and they have a larger database to fall back on as they look at asking prices on their portals, so they are useful for spotting trends in asking prices but they are unaware of the actual sale prices of houses. If you take all of them into consideration you get a general idea of where the market is going. However, looking at asking prices on property portals gives an overestimation of actual prices because the nutjobs asking ridiculous prices which nobody will ever pay for their properties take the average higher than it would otherwise be. Just to give an example of how divergent the various measures are for looking at prices in Spain take a look at this graph from Spanish Property Insight which is their tracker of Spanish house prices based on the data from various actors involved. We even have the rather amazing suggestion from the Notarial College that prices are falling year on year, which is mad considering the Registries (Using the same figures remember), give price rises over 8% on average over the year up to May 2018.  Tinsa, which is a valuation company, give rises around 4% but as they do the valuations they are effectively saying "this is how we are valuing" not where the prices actually are. [caption id="attachment_5273" align="aligncenter" width="750"]Spanish Property Insight Price Tracker Spanish Property Insight Price Tracker[/caption] Now this is the national picture of course and as will be seen in the figures from Pisos.com the national average has nothing to do with the local variations, and the local variations are essentially for particular areas of cities and municipalities where huge hyperlocal variations can also occur. Having said all that, let's get into the nitty gritty of the figures. [caption id="attachment_5274" align="aligncenter" width="693"]Valencian Community Prices Changes Annually Valencian Community Prices Changes Annually[/caption] In this first table we can see that the prices being asked in the Valencian Community are being pushed by the provincial capital cities of Valencia and Alicante. Valencia City asking prices have increased by 21.59% annually (Which is then contradicted by the figures for the individual areas) with a 13.85% increase in the third quarter of 2018, showing the increasing pace of price rises recently and also the effect of the summer. The annual change in the whole of the province of Valencia of 8.54% is hugely affected by the number of transactions in the city of Valencia itself meaning that prices are mostly flat around the rest of the province but surging ahead in the city. This confirms the anecdotal evidence we have from talking with owners, agents and developers for the last year. (We will be making recommendations based on this and other factors later.) [caption id="attachment_5275" align="aligncenter" width="332"]Spanish Average Property Price in the Third Quarter of 2018 Spanish Average Property Price in the Third Quarter of 2018[/caption] The average cost per square metre of Spanish property is 1653 Euros. As you can see the average in Valencia City is now 1896 Euros per square metre which of course is above the average in Spain and well above the average in the Valencian community of 1397 Euros, but it is below that of other major cities in Spain. And being the third biggest city in Spain it is just a fraction of the price of property in Madrid and Barcelona, the two biggest cities, but surprisingly less than half the price of San Sebastian for example which is the most expensive in Spain. Prices in Valencia on average are around 44% of prices in Barcelona and 56% of prices in Madrid. It can be argued that the quality of life is just as good or better and value for money is obviously much better. [caption id="attachment_5276" align="aligncenter" width="178"]Provincial Capital Property Prices Provincial Capital Property Prices[/caption]   [caption id="attachment_5282" align="aligncenter" width="750"]Prices in Valencia Are Much More Affordable Than Madrid and Barcelona Prices in Valencia Are Much More Affordable Than Madrid and Barcelona[/caption] Within Valencia City itself prices vary according to zones. The highest prices are to be found in L'Eixample which includes Ruzafa of course, The Historic Centre and Pla de Real, the area around Valencia's football ground towards Viveros park. The lowest prices can be found in Jesus, Pobles del Nord and L'Olivereta. Effectively the further out from the centre the lower the price but take a look here at how far you are from the centre. The biggest price rises annually were in Benicalap, which is interesting (as we will note later) and the biggest recent price rise was in Rascanya, which has started from a very low base. There were no price falls in the last year in the city. [caption id="attachment_5277" align="aligncenter" width="293"]Highest Property Prices in Valencia City Highest Property Prices in Valencia City[/caption] The movers and shakers are as follows. Rascanya asking prices have increased by 11.09% in the last quarter and L'Olivereta prices by 10.65%. remember these are two of the cheapest places to buy in Valencia so investors are ploughing into these areas as the rental returns after purchase are often very high due to the low prices. The lower prices mean that smaller investors can buy there along with first time buyers and people with lower budgets. Benicalap and Patraix were the highest rising prices in the last year at 20.35% and 17.88% respectively. Patraix is right next to Jesus which has the lowest average prices in the city so many investors are looking to move into this area too for decent returns on rentals and potential capital gains in the future. **(I don't see how the city can rise at an average of 21.59% if the highest rises were 20.3% but as I said, you know, "methodology" ;-) ** [caption id="attachment_5279" align="aligncenter" width="290"]Quarterly Rises by district in Valencia Quarterly Rises by district in Valencia[/caption] If we take a detailed look at the asking prices in the city's various districts we can see some startling differences between areas. Prices range from 1155 Euros per square metre in Jesus up to 3009 Euros in L'Eixample. (Even in L'Eixample there are differences as L'Eixample itself has higher prices than Ruzafa but they are both included in this area for the official figures. What I take from this are various interesting stats. Apparently the prices in Poblats Maritimas have actually fallen in the last quarter (That includes the Cabanyal, Malvarrosa and el Grau) That is definitely not the case, in fact I would go as far to say that this is laughable. And an annual rise of 4.62% is derisory compared to the reality of the situation. I suspect that there was a release of a lot of bank properties onto the market in the "worst" area of the Malvarrosa, which many estate agents promoting bank properties have. Consequently they appear various times on the pages of Pisos.com as all of those agents advertise, and this means the average is being pulled down. [caption id="attachment_5278" align="aligncenter" width="234"]Annual Price Differences in Valencia by area Annual Price Differences in Valencia by area[/caption] Equally, I think that the rise in Benicalap is overstated and might well be because on the periphery of the area, near to the unfinished Valencia Football Ground, Nou Mestalla, there are quite a lot of new developments being advertised and they are at a much higher price than traditional properties in Benicalap pushing up the average. Despite the rise in Benicalap the average price is still only 1465 Euros per m2. You can still find properties for considerably less because this average is influenced by the higher prices of the new developments previously mentioned.  One area we like that is showing very little growth in price on these figures is La Saidia (Zaidia) at just 3.46% annually. Due to the proximity of the Historic Centre to La Zaidia we are seeing excellent demand and many sales in this area as we have identified it as a great place to be. You will also notice that L'Eixample prices have risen by 14.70% annually according to these figures. Ruzafa prices have increased more and the traditional area of La Zaidia less but again they are classed together. We mentioned to start with that prices in the city are pushing up the average prices in the province as a whole and we can see this by looking at the asking prices in the various towns and villages in the province. The next three tables show the price rises, and falls, in the last quarter and year in the province. Now these come with a huge caveat, the sample size in some of the towns is very small, remember this a a comparison of asking prices for each town. It may be that a huge luxury property on the edge of town has been sold or the owner has taken it off sale and many cheaper flats have come onto the market. This can easily give a distortion in the percentage rise or fall when there is a small sample size. Therefore with caveats, what can we surmise from the figures below? [caption id="attachment_5283" align="aligncenter" width="571"]Valencia Region Price Changes Valencia Region Price Changes 2018[/caption] [caption id="attachment_5284" align="aligncenter" width="699"]Valencia Region Price Changes 2 Valencia Region Price Changes 2[/caption]   [caption id="attachment_5285" align="aligncenter" width="465"]Valencia Region Price Changes 3 Valencia Region Price Changes 3[/caption] Firstly, the highest prices are for places right on the edge of Valencia city such as Alboraya or Paterna or places that are considered "Good" places to live and have a large number of luxury developments such as Rocafort and Godella including attractions for homebuyers such as International Schools and Country Clubs (I don't know why La Eliana isn't on the list) and they tend to be on the public transport routes, especially the metro lines coming out of the city. As you get further away from the city of Valencia prices tend to drop per square metre.  Regarding price rises we are seeing the highest rises, 10% plus annually, on the edge of the city as people get pushed towards these areas from the city itself due to affordability issues. A few of these places can actually be considered a part of the city such as Alboraya, Mislata, Quart de Poblet and Xirivella as examples. These places, as they are parts of the city and are generally comprised of apartments, also have enough price references to mean that the average asking prices are fairly true to the actual situation and not over affected by one development, certain special properties or a specific problem building for example.  Price drops are occurring still once you get over half an hour away from the city. The more remote the town is from the city and the smaller it is the greater the drops you can see as a rule of thumb because there is less demand, Valencia acts as a black hole sucking all investment and population into it as job opportunities, leisure facilities, universities, beaches and many other people are there. A village inland more than thirty minutes away is more and more tending to be composed of second homes for those living in the city whose families are originally from the village. An example can be seen if we trace the route of the CV35 motorway from Valencia to Casinos. Five minutes out and we get to Burjassot (a 21% rise in the last year) next we get to Paterna (11.48% rise) then Betera (7.18% rise), La Pobla de Vallbona (8.33% rise), Lliria at twenty five minutes away (0.81% drop) and Casinos, 35 minutes to the city (4.35% drop). Prices further along the cv35 in Chelva, Villar del Arzobispo etc... are dropping even further but that is anecdotal as there are not enough price references to make a trend. Once you move outside the city, the easier it is to get into Valencia and the better the local facilities and amenities are, the higher the prices of the properties and the greater the price rises because there is a latent demand for good property in good locations. Or rather, what we have always known, location, location, location. Luckily here at Valencia Property we know all about the locations and facilities.  As mentioned above though what recommendations would we make knowing these figures. 
  1. Valencia is still underpriced compared with comparable cities both in Spain and around Europe.
  2. Peripheral areas of Valencia are good "Investments" as prices rise and they are comfortable to live in due to excellent communications.
  3. If you are buying in the city itself there is always a latent demand so you are competing with other buyers. Therefore expect to buy at asking price or very close.
  4. There is a "Ripple Effect" from the city forcing prices to rise on the edges and becoming less apparent the further you get away from the city itself. 
  5. Despite all of this, local and even individual street or apartment factors can affect the prices asked for by sellers. Take a look at how prices vary in Valencia according to different criteria in this post.
  6. The market is rising and in some cases rising fast however prices are still nowhere near where they were in 2007-8 when prices in L'Eixample and the Old Town touched 3500-4000 Euros per square metre on average and well above that for the best properties. 
  7. If you move yourself out of the city within twenty minutes in the car and on the public transport routes then you will get a whole lot more for your money. 
  8. You are better to buy in the full knowledge of all of these factors and having gleaned local knowledge from those in the know. That is what we are there to do for you
Valencia Property Prices Third Quarter Report 2018
Valencia Property Prices Third Quarter Report 2018
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