The Rental Crisis in Valencia Updated

At the back end of October last year we wrote about the rental crisis in Valencia and what it meant for buyers, tenants and us as a business moving forward. Last week on the podcast we updated you on what has been happening since and today here we are going into a bit more details on that and connecting that to the progress we are making in the background of the new Stepping Stone Rentals website and project in order to help alleviate some of those problems.

Firstly though, just to let you know one thing, Valencia Property continues to be hugely busy while at the same time starting up a new business, website and finding new employees from scratch. We have just had a week with the most property enquiries seen for about six months. And we haven't had a huge slowdown in the intervening period either, it's just that in December demand was off the scale.

You should know about how we work though in order to be able to work with us in the best way. We have a whole article about it here but the background is as follows. Our process when an enquiry comes in is to send it out to all of our colleagues who choose which clients to work with based on what they have seen recently, their current product knowledge and whether that tallies with the requirements of the client. Each agent arranges their own timetables and work schedule and can choose to work more or less according to their family life, holidays and energy levels.

So, when you fill in the First Step form on our website make sure to make yourself an attractive option in this heavily busy period so that you stand out from the crowd. It's not an issue of budget, it's more a case of whether you look like you will be an interesting person to work with. Only this week we have had to blow out a couple of potential clients because of:

1) Unrealistic expectations and when informed of this doubling down and insulting the agent

2) Looking like too much hard work by essentially writing a novel of what they expect from us six months before their visit and how we should be answering their every "War and Peace" mail with an equivalent tome within minutes of receiving it. If you want our assitance then allow us to help ;-) but we work to our process not to your expectations of how we should work.

Trust the process, it works.

Be nice. It works even better

The Rental Crisis in Valencia:

Tips for Finding the Perfect Property in our Latest Podcast

Are you struggling to find a rental property in Valencia? You're not alone. The pandemic and the influence of Airbnb have led to a decrease in available rental properties, making the market more competitive than ever. But don't worry, there are still opportunities for investment in rental properties, especially in the towns and villages surrounding Valencia.

According to our recent podcast episode, there is a major demand for rental properties in Valencia, with our clients cherry-picking the best deals. However, Spanish people generally do not buy to rent out due to concerns about dealing with tenants, and investment funds are holding onto empty properties. This makes it difficult for foreigners to secure long-term rentals, but there is hope.

Enter Stepping Stone Rentals, a new project that offers a secure and reliable way for people moving to Valencia to find medium-term rental properties. The rentals are hand-picked and fully equipped, and the initial rental period is three months, giving clients time to get used to the city and surroundings before making a more educated decision about their eventual destination.

But how can you be the perfect client for a rental agent like Jess, who has been working in the rental market in Valencia for the past 20 years? According to Jess in the podcast interview this month, it's essential to be honest about your needs and preferences, and to trust her expertise and local knowledge. She doesn't waste time as clients often have limited time to find a property.

Managing expectations is also crucial when it comes to finding a rental property in Valencia. Be honest about your budget and preferences, and use resources like Idealista to gauge the market. But most importantly, be open-minded and trust the process.

So if you're struggling to find the perfect rental property in Valencia, don't give up hope. With the right approach and the help of experts like Jess and Stepping Stone Rentals, you can find the perfect place to call home.

In the podcast we talked about the updated numbers of both properties for sale and rent in Valencia. This is how the story has developed since October.

Valencia Faces Rental Crisis: Supply Plummets as Demand Soars

The rental crisis in Valencia has worsened significantly since October, with an alarming shortage of available properties. This crisis, initially driven by factors such as the pandemic and the influence of platforms like Airbnb, has become an even more pressing issue for both locals and those planning to move to the city for medium or long-term stays. As a result, property agencies, including us here at Valencia Property, have been unable to guarantee positive outcomes and have been limiting new clients for rental services. You may notice when contacting agents via Idealista and other portals that they don't even respond. If you are not here on the ground you are an afterthought for them.

The decline in the supply of rental properties began even before the pandemic due to the conversion of long-term rentals into short-term holiday rentals. However, the situation worsened during the pandemic as families sought separate living arrangements for their adult children. The rise of single-occupancy apartments and the persistent influence of Airbnb have now exacerbated this shortage of course. Although town councils have attempted to control the availability of rentals by imposing licensing restrictions, the newly elected Valencia town council is likely to lift these restrictions or not apply them in the future, further worsening the crisis.

In our updated statistical analysis of the rental market in Valencia the number of properties available for under 500 Euros per month has dropped to zero. Even when considering properties up to 600-700 Euros per month, the options are limited, with most located outside the city centre. The scarcity continues for higher budgets as well, making it increasingly challenging to find properties that meet clients' desired criteria. Typically now to have a decent choice you need to have around 1000 Euros and be on the ground here and ready to go so you are an attractive option among the many searching for property for the owners looking to rent out to tenants.

The primary reason for this crisis is the high demand for rentals, whether from the local market or individuals relocating to Valencia for various reasons. However, there are limited incentives for investors to enter the rental market due to the perceived lack of support for owners from government at a local, regional and national level. Most Spanish people, though not all, generally avoid buying properties for rental purposes due to concerns about difficult tenants and potential property damage. Investment funds, banks, and other entities holding large property portfolios are reluctant to rent out their properties, as they prefer to wait for the opportune time to sell and selling a property with a sitting tenant is more difficult because people want to buy for their own use. Additionally, the lack of available whole buildings for sale restricts the market further.

In both the podcast and original article we highlighted potential opportunities for buyers interested in purchasing properties for rental purposes. With a considerable number of properties for sale at affordable prices, buyers could achieve a return on investment by renting them out. However, the central areas of Valencia offer very few options, pushing investors to consider properties in surrounding towns and villages or on the edge of the city itself. One of our targets for rental properties, under 175k in the city has seen a reduction in availability of 50% since October, just six months.

To address the rental crisis, we suggested several solutions. Government action is needed to compel major property holders, such as investment funds and banks, to rent out or even sell their apartments. Additionally, increasing social housing with fair rents could alleviate the situation, although this would require significant time and financial investment. Encouraging banks to sell their extensive housing stock with low-interest rate mortgages may also incentivize investors to enter the rental market. Nevertheless, the complexity of the crisis and sustained high demand make finding easy solutions challenging. So nothing major is going to change very soon.

Our Solution For Our Clients

In response to the challenges faced by individuals seeking medium-term rentals in Valencia, we have recently introduced "Stepping Stone Rentals". This service aims to provide secure and fully equipped rentals for digital nomads, remote workers, Schengen visa holders, international executives and techinicians seconded here for work reasons and others relocating to Valencia. It will be up and running fully by the end of the summer but is already working in the background getting everything ready including staff, website, organisation, properties and more.

Stepping Stone Rentals offer an initial three-month rental period, allowing tenants to settle in and explore the city before making long-term decisions both in terms of rental or purchase. The service includes our superb support, fast internet access, a welcome pack, and assistance in finding a long-term rental or purchase from Valencia Property. We also have plans to expand the service beyond Valencia in the future, watch this space.

The rental crisis in Valencia has reached a critical point, with a severe shortage of available properties. While there are no easy solutions the introduction of Stepping Stone Rentals offers a secure and reliable option for individuals seeking medium-term rentals in the city both for purchase and renting out. Meanwhile, addressing the crisis requires government intervention, encouraging investment, and increasing the supply of affordable housing in the long term.

If you are interested in either buying a property to offer through Stepping Stone Rentals or finding your initial rental then simply contact us and let us know your requirements. We are here to help.

News From Valencia

It slipped out this week, despite the signed confidentiality agreement, that Tesla are planning a huge new factory to the west of Valencia (Near Cheste apparently) to produce their cars for the European market. Huge news if true. With the VW plant near Sagunto and Ford's plans to make their plant to the South of the city into their European hub for electric cars there is a bright future here in Valencia for investment and the electrification of the European car fleet. Keep an eye out for more news soon.

Also in sport Valencia kept their position in La Liga on the last day of the season and Levante are in the final playoff to go up to La Liga where they will play Alavés after a big win against Albacete 6-1 over two legs in the play off semi-final. The first leg was yesterday and finished in a 0-0 draw so txhere's all to play for in the second leg and the final game of this extremely long season is next Saturday at Levante's stadium. Touching wood for a Levante win here as a season ticket holder and hoping to go back up to the first division.

Property of the Week

Russafa Apartment on Big Pedro Street

Lovely apartment here on a quiet street, despite being in the middle of Russafa. The street is named after King Pedro III, known as big Pedro, once King of Valencia, Aragon and Sicily. Tough man by all accounts, this might go the way of other streets named after tyrants, but Margaret Thatcher Square is still there in Madrid, so big Pedro wouldn’t be the first on my list if I was doing any renaming.

Anyway, back to the apartment. First floor no lift, but 2 bedrooms, high ceilings, wooden floors, wrought-iron balconies. All the features you imagine when you think of a Valencian apartment. Great as a holiday getaway for yourself, but also very attractive to mid-term tenants to make a bit of income when you aren’t enjoying it. And a surprisingly decent price, given the way prices in this neighbourhood have gone in the last few years.

Somebody once said there is no such thing as society, but she was wrong, and Valencia is the proof. Get in touch and make yourself part of it.

If You Liked This...

Then there is plenty more where that came from. Take a look at our recent posts about various other issues in the Valencia Property market by clicking on the images below.

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