For what is maybe our final post of the year we thought it was time to look back at what was learnt in 2020, a different year of course, the year of Covid and Brexit, what many people have called the worst year ever. However, in terms of Valencia and its property market the year wasn’t too bad.
In short the market continued, it adapted and working methods changed. There were a few constants though, some surprising, and so we include them here. Let’s take a look at 2020 in Valencia and Valencia Property.
Property Presentation Changed
We have always been about seeing a property in person, checking out every nook and cranny and knowing the background. Turns out you can do most of that without physically visiting the property now. Our 360º Tours, Facetime and Whatsapp video calls and Consultation calls have managed to fill the gaps in for many people who are willing to buy remotely.
360º Virtual Tours were especially important and not only because of restrictions on travel. In many cases houses are being sold by sellers who may be wary of having too many visitors due to health issues and Virtual Tours allow clients to discount properties before visiting, or to express a strong interest before arriving meaning their visit is not a waste of time and they are not presented with surprises when they finally get to the property. The property below was sold remotely without a physical visit to one of our clients in the UK who then rented it out immediately because they knew it would fit their portfolio.
We have visited houses and apartments for people, made 360º Virtual Tours, made Facetime calls where they get to ask everything about a property and walkthrough videos of numerous properties this year and clients have bought, rented and ruled out certain properties due to those visits.
The look of our our website changed, funnily enough on the first day of lockdown after six months working on it, and we got some great feedback from our clients asking for more features which we have added into the site. You now have maps, property features, 360º Virtual Tours, the ability to contact us through whatsapp and more built into the site and this blog is now incorporated into the main site allowing you to see the latest properties along with the latest news about Valencia and Valencia Property in the same place.
We Are Still Surprised By Some Properties
Some properties sell quickly and others hang around. Some have loads of visits but don’t sell, others sell on the first visit or even before (See above), and some don’t even get enquiries. Some of those properties that have surprised us this year include this property in Olocau which has had very few enquiries and yet I would describe it as one of the best value for money properties on the site. Yes, it’s a bit of a mess but it’s a lovely location, with great potential and could be a superb home for somebody. Maybe people are put off by the amount of work they perceive needs doing. Click on the image below and send a mail letting us know why you think it is not selling.
Government and Banking Help For The Market
The property market was helped out indirectly in two ways, firstly, the government like many others around the World paid out money to people forced to stay at home with furlough payments. This allowed them to continue to pay their mortgages and rents meaning they weren’t forced into a destitute position even if they didn’t qualify for a mortgage holiday. Payment holidays were put in place by law for those affected by the pandemic meaning banks were obliged to stop collecting mortgage payments while the situation continued.
Some banks increased this protection by contacting those who fell through the cracks of the government scheme by contacting their mortgage holders and offered them the opportunity to pay just the interest on their mortgages for a period if they wanted.
What these measures have done is to create a situation where there is not a sudden glut of properties coming onto the market and thus creating a crash in prices. We will see what happens in the next year or so when the government and banking subsidies and help finish. I suspect that there will be certain properties that come onto the market at that time at discounted prices.
The Market is Resilient Now
Despite a three month almost complete lockdown where we were only allowed out of the house for essential shopping for an hour a day for a month followed by an extra hour for exercise for another month, then gradual loosening of restrictions, the Valencia Property market remained buoyant. There have been almost as many transactions in the Valencia Property market in 2020 as there were in 2019 despite a three month lockdown.
This was largely down localised demand from Valencians who realised in the first lockdown that the place they were living in was not apt for homeworking, studying at home and everything else required in lockdown, they needed something bigger and with outside space. Once we opened up then demand was released and many more sales were made in the summer than is usually the case including the suburbs being massively in demand, see our ratings for the towns around Valencia here. (the summer is usually holiday time and things close down here)
This local demand offset the lowering of demand from foreign buyers who were prevented from travelling to Valencia for much of the year. Dutch and Belgian clients have been thin on the ground this year due to restrictions at either the Spanish or their home end. However we know that the demand is there for when they are allowed to travel again. The same is true of Brits but due to Brexit the type of British buyer will likely change radically in the next few years.
Foreign buyers usually make up around 20% of the Valencia Property market, up to 35% in Alicante region, and post vaccine and with lifting of travel restrictions in the next year we expect to see a large increase in the 2020 foreign buyer numbers as people realise you only live once and if not now then when! Pent up demand is huge!
This demand along with the continuing search for more suitable homes for Valencian families allied to a low interest rate environment will keep the market resilient in the next year even once the help from banks and governments dries up.
Interest Rates Keep a Lid on Major Discounts
As long as interest rates remain low, and it seems they will remain low in the Eurozone for many years to come, there will not be major numbers of distressed sellers looking to sell properties at a major discount. If your mortgage costs you as little as 200-300 Euros per month and rental values are a minimum of 500 Euros a month people will do everything they can to avoid selling their property even if they find themselves in negative equity. Government help with payments, as described above, has also helped in this respect.
Distressed sales only occur when the seller finds themselves in a situation where they need to sell urgently. Sometimes this will be for reasons of inheritance and taxes, sometimes because of loss of their job and sometimes because of a family situation such as divorce or wanting to help out a child or parent by getting some money in. The four horsemen of the apocalypse.
However, the odd major discount does happen and we keep our clients up to date on them with our Whatsapp broadcast list. Click on the Whatsapp icon on this blog and send me a message saying you want to be included on the Broadcast list if you are interested in finding out more and also keeping up to date with the latest news, properties and videos.
Prior Contact With Clients is the Best Way To Help Them
We are 3-4 times more likely to find the perfect property for a client who has been in contact well before arriving in Valencia than those who contact us when they are about to arrive or already here. This prior contact allows us understand individual client requirements, set up itineraries and make sure we are on the same page when showing clients around.
To make sure that you get the best service use our Consultation Call service and make it well before you come over. This has been our most successful service of the year and it started during the lockdown in March/April.
Spending More Time With a Client is Better For Us All
Usually we are so busy with clients that it’s like a treadmill from client to client and day to day. 2020 has allowed us to spend more time preparing people’s visits, spend more time with the clients while they are here and make the follow up better. This has meant that despite sitting out three months at home we have been as successful as last year with sales and even more successful with the rentals that we do. Also our relationships with our clients have become even better than before leading them to pass their friends and family onto us for their own purchases.
We Can All Work in a Different Way
Work has evolved this year. Lockdown meant that companies had to find a way to carry on operating and their reluctance to sanction remote work agreements morphed into a necessity for their employees to work from home. Many of those remote workers now wish to put the commute behind them forever saving them time, money and endless hours of frustration in traffic jams.
For years we at Valencia Property have worked in a different way. We have just two fixed rules in the company, we all work remotely and if a meeting is needed it is generally done over a coffee. Add to this other preferred scenarios such as no full in-person workplace meetings, using whatsapp groups as required for messages and other remote contact methods such as Slack and Online Databases and we have for years managed to work in this way without a central office. Our methods have become more normal as this year has progressed.
If we can do it then so can many other businesses and we have many clients who have moved to Valencia this year because that is how they work too now.
Valencia is THE Most Popular Destination
Valencia was named this year as the best place to live in the World by a survey of Expats living around the World. People continue to be delighted by the quality of the city, its environment and surroundings and the work life balance they can achieve living in Valencia. In a world where you can now work from anywhere in many cases does it not make sense to live in a place that gives you and your family a much better lifestyle?
UK Buyers Still Want To Get Out Because of Brexit
Brexit has thrown a spanner into the plans of many UK nationals who only hold a UK passport. They no longer have the right of free movement to come and live and/or work in Spain. This affects pensioners who were planning to retire here, long story short, much more difficult but still possible, see our post here, professionals wanting to live and work remotely, those looking for jobs here for which Brits were previously in demand such as teaching and more.
The big question that any employer now asks themselves will be why employ a UK national with all of the hoops the employer will have to jump through in order to do that compared with hiring an EU citizen, huge opportunities exist for Irish citizens in teaching English and International schools now.
However, 48% of the UK population were effectively ignored for the last four years. Remainers are rightly bitter about that and many want to leave what they view as a sinking ship to rejoin the EU. The Golden Visa is now an option for UK nationals investing over 500k into property in Spain and Valencia is a great place to invest that money as you get a lot for your money and a lovely shiny Golden Visa allowing you your free movement around the Schengen area meaning you can stay here permanently. We expect to see a huge uptick in Brits buying property in Spain to get the Golden Visa.
Requirements Change According To Circumstances
As we mentioned earlier many people recognised that they were living in the wrong property for their family requirements during the first lockdown. This will not be permanent though. Requirements change for everyone according to family circumstances, work, lifestyle and stage of life. As circumstances change over the next few years we expect things to change again. In the past city properties became more popular for foreign buyers after the advent of cheap flights across the continent. Prior to that people looked to more countryside homes.
The increase in broadband internet connection to every small town and village allied to remote working is likely to change the market again with larger village homes likely to become more popular.
Connectivity, community and communications are likely to drive the future changes in property demand throughout Spain, Europe and the World. Lifestyle is another factor. Why live in an overpriced bedsit in London if you are no longer tied down to that particular area through the necessity to present yourself at a specific workplace five days a week. When you are searching for properties you should now bear this in mind.
Medium Term Rentals Prior to Buying Are A Thing
We have done so many medium term rentals this year compared to previous years. There are many factors at play here but one of the major ones was the desperation of Brits to get into Spain this year and get residency before the end of the Brexit transition period.
Medium term rentals of between 3 and 6 months have been excellent news for people who had properties that they had previously rented out on Airbnb, an industry decimated by the pandemic. They have also been good news for people wanting to try before they buy and get used to the area while finding where they want to be long term and also for those wanting to work remotely but without the high cost of airbnb type rentals where a daily rate can easily mount up to a high monthly cost very easily.
Previously owners were not really keen on Medium term rentals preferring airbnb or long term rentals on their properties. This has changed now potentially for good.
Are You Joining Us In 2021?
If you have spent 2020 on hold waiting to see what happens 2021 could be your year to finally do this. We have all realised that anything can happen at any time so the question has to be why wait?
We look forward to seeing you and helping you to find your perfect Valencia Property in 2021. And if you want to know more just click on the images below for more information or contact us.