On a regular basis we update you with the situation in the market here in Valencia and not having done this after the first quarter, we were a bit busy, it's time to catch up. We posted our last update at the end of 2023 so we are using the same breakdown so you can compare and contrast. We are looking at what's happening on the ground of course, some of which we mentioned in the podcast last week where Gavin gave his thoughts on what's happening. You can listen to that here (The chat with Gavin starts at 9 mins 15 secs in). We'll also look at perspectives for the rest of the year.
Sales
At the end of 2023 we reported that it had been a record year for sales for our company with sales volumes up 20% on 2022. This year so far has already equalled last year in terms of value of sales though we are still some way away from the number of sales with around 25% more sales required to make the same number of sales as last year (Not bad with half the year left). As this suggests the value of each transaction has risen considerably. Average sale prices are up 24% this year compared to last year where prices rose by 27%. In fact the average sale price is up by around 54% in 2024 compared to 2022.
Now here's the thing, that doesn't mean prices have risen by 54%, see below for that stat in the market situation, it just means we are getting sales through for higher value clients and there are various reasons for this;
- There are hardly any lower price sales as the lower prices no longer exist (Sales under 200k are just 13% of all sales and most of them are concentrated in the first couple of months of the year when the last places available at lower prices were sold)
- The rush to get the Golden Visa before it ends has meant a lot of 500k plus sales going through in the first half of the year.
- We are attracting higher value clients via our social media and the higher profile of Valencia as a city and destination. Equally our reputation grows and grows year on year and therefore we grow as a company.
What does it mean for those looking for property in Valencia?
Well, you need to have a budget that suits what is out there in the city. We are having to turn away clients at lower budgets for the city as there is literally nothing we can help them with unfortunately. You now need to be thinking of a budget of at least 250k in the city for anything decent. If your budget is lower then you should be planning on being outside the city in the suburbs on the metro lines to get in and out of the city easily. There is still plenty of cheaper property around but not in the city itself. Have a word with us about your options and the best places to buy at different price points by booking one of our free consultation calls.
Client Nationalities
As in 2023 our number one nationality for clients is... the Good Old US of A... BUT... only just. Currently 32% of our sales this year have been to clients from the USA. The UK is making a big comeback also with 32% of our clients this year so far having at least one of the partners from Blighty. 15% are from the Netherlands showing the influence of our new Dutch page although that page has also brought in clients from Denmark, Belgium and France and we have also had buyers from Hungary, Australia, Peru, Ireland, Japan, Lithuania, Turkey, Canada and even Spain through the main company.
Locations
60% of our sales have been within the city of Valencia itself. The second most popular place is L'Eliana with around 10% and then there are various places that are popular elsewhere with Denia, La Pobla de Vallbona, Chiva, Torrent (Calicanto and the town of Torrent itself), Cheste, Burjassot, La Cañada and Ribarroja being represented.
Types of Property
As usual where the majority of sales are in the city of Valencia itself then apartments are the major type of property but that figure has gone down to just over 55% of sales as villa sales rise. Just over 30% of sales are for villas and 15% of sales are for townhouses. As last year apartment sales were also made outside of the city of Valencia itself and townhouses were in the city, Cabanyal, and also other towns such as La Pobla de Vallbona and Torrent.
You get a lot more for your money in apartments in the towns surrounding the city now and that is also the case with the townhouses we have been able to source for our clients. The majority of villa sales are concentrated in L'Eliana and on the coast in Denia but the suburbs around Valencia are looking attractive now pricewise as you can get a villa for the same price as a city apartment with the attendant extra space that goes with it.
Just like last year there are a lot of dwellings that we have sold requiring a modernisation and our teams at Valencia Remodels are extremely busy with projects ongoing and finished. We talked about this on the latest podcast too with Maz and you can hear more about the work going on from 20 minutes and 15 secs in to our podcast episode here.
Finance
Higher interest rates put some people off getting a mortgage towards the end of last year and at the start of this but this fear has now evaporated as people get use to the higher rates and we are seeing more mortgages being signed at fixed interest rates. We did have one signed at 4.5% but the majority have been around 3.75% with discounts for the usual reasons; salary, direct debits, insurance and alarms. This means people are generally paying around 3% fixed over an average of 20 years in the end. Rates are starting to fall and another rate fall is expected over the summer with another possible in the autumn meaning that mortgages should become even more popular as they get cheaper in the rest of the year..
We have found that people who have been able to pay for their purchase in full have been taking out small mortgages to accompany their own money at these rates and others have been taking out mortgages to get what they want in the market because with their available funds they cannot find a property that suits them; maybe they get an extra bedroom or more space or that longed for terrace by paying an extra 50-70k and a mortgage over 20 years for that extra might only cost them around 250-300 Euros per month.
Reasons For Buying
* It's a better life isn't it? *
But then it's also safety, political uncertainty elsewhere, THAT debate between the orange Sh*tgibbon and Biden, the botched assassination attempt, the mess that is the UK (hopefully there is now a better future for the UK now the clown car government has been thrown out), it's the war in Ukraine, educational opportunities for their kids, it's retirement in a place where costs are lower than other countries, it's the general vibe of Valencia, it's lifestyle design, it's 112 reasons to live in Valencia, it's the climate, it's meeting new people, it's just so many reasons. When you can live anywhere then Valencia is one of the first choices for people.
Client Funnel
Our funnel of clients coming through suffers for two reasons in the summer, tourism and August. As mentioned, we are mostly closed for August so clients for that month are thin on the ground because we tell them not to come. We only deal with people who cannot come at other times of the year and they get fewer places to choose from and find out that everywhere is closed or on severely restricted hours. It's difficult.
Equally, we get a lot of tyre kickers in the summer here on holiday who we cannot deal with because they ask us to take them out NOW but we already have our long term clients here. This happened three times this week with people here for just two days and asking us to drop everything and take them out. We can't. You can find out how best to work with us at Valencia Property in this post to get you the best service and so this doesn't happen to you.
The rest of the year is looking extremely good though in terms of already booked in clients. We have a strong September coming up and October and the rest of the year is already starting to fill up. Make sure to book your visits with us as soon as possible.
Situation of the Market in General
It's carnage out there! It really is.
You have little choice and you need to make decisions quickly. We had to tell an owner to go to hell this week as they put so many conditions on visits and the way they wanted to sell the property to any interested client. Luckily we are not tied to anyone in particular selling their property and we do this to protect the interests of our buying clients.
In the last three years prices have risen by 39% according to official statistics and since 2017 that rise comes to 78%. Our average sale price has risen by 120% in that time as we have been getting more high end clients and fewer low end investment properties are available. Our clients who bought over the last ten years are extremely happy bunnies.
We are managing to find the ideal property for so many of our clients but some people are having to go away empty handed and we can no longer guarantee that something will come up as prices rise and supply dwindles. It's better to make the decision now on something that satisfies over 80% of your requirements rather than waiting and hoping that a 90-100% property will come up. It's likely now that it won't. As we said in a post a few weeks ago, some people who didn't make the decision last year on very good properties now have no chance of finding what they want.
Supply continues to go down. In December 2023 we reported that supply had gone down to 5565 properties available in Valencia. That number is now exactly 4000 having dipped below that number into the three thousands last week. An almost 30% reduction in six months. If that happens again in the next six months we will be at under 3000 properties for sale and with current trends and demand it will continue to dwindle.
The Rental Market
If the sales market is carnage then the problems in the rental market dwarf that (I don't know a word to describe ten times worse than carnage, suggestions welcome but don't try decimate as that is not as bad). Prices have risen by around 60% over the last three years at the same time as supply has not just dwindled but dried up. For foreigners it's even worse as they have to make themselves an attractive proposition for the landlord and that often means making higher offers or paying a year up front.
The latest moves by the government at a regional and national level to crack down on Airbnb and short term rentals have not yet made the situation easier and the potential crackdown on medium term rentals may be a huge problem for those looking to come over and rent on a medium term basis while they look for a long term solution ewither buying or renting.
Our sister company Stepping Stone Rentals is going from strength to strength now after a slower than anticipated start. However, the potential crackdown on medium term rentals may mean we have to close down this option in the next year or so. The government has proposed that all medium term rentals are classified as long term rentals with the attendant rights for extension of contracts for medium term tenants.
This is totally unacceptable for the huge majority of our owners who use their property themselves and rent out medium term to those only wanting a short time period stay. The risk of occupation long term, with the right to continue being there would not be acceptable and would move those properties off the market. We await the news on the proposed changes. Personally I don't think it will happen as killing off medium term rents essentially kills off the Digital Nomad visa, something that the current government put in place and also supports massively, because if you cannot find anywhere to live then why would you come to Spain to work remotely.
Our Changes in Valencia Property
Here at Valencia Property we continue to grow. We have taken on another Virtual Assistant helping us to grow our offer for properties and we are looking to take on someone new in September. Just in case you don't know we concentrate on sales through Valencia Property, we have a Dutch branch Valencia Property NL, we do our medium term rentals through SSR, see above, we organise and carry out remodels through our reform teams at Valencia Remodels. We are active on all forms of social media where you can follow us and we organise all other parts of your move to Valencia and Spain. What are you waiting for to contact us and get started with your move?
The Outlook Going Forward
For us as a company things continue to be bright. For you as a potential buyer of Valencia Property things are also bright as long as your budget allows it. If you are looking for rentals when coming here then things are somewhat less bright!
If you are willing to listen to our advice and think a little outside the box of what you ideally would want as a place to buy then things can be extremely bright. Book a consultation call with us and let's talk. But before that, fill in the form below and let us know what you are looking for and how we can help you.
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Educational Content
For any dweebs called Dwayne out there, and indeed for everyone else, this blog is educational too. We have used all of the words in English that start with "Dw" in this post (Including Dweeb which isn't recognised as a word and obviously Dwayne and I know a Dwayne so know that exists). I bet you didn't know there were so few of them. Now if you go back and take a look you might be able to find them. Enjoy.
Meanwhile, take a look at our apartment and villa of the week below and then if you liked this post follow through with the other related recent posts below. Take a look.
Property of the Week
This property is very close to the riverbed, at the level of the City of Arts and Sciences, on the sixth floor on la calle de La Dama d’Elche. For all you ignoramuses out there, the Dama de Eche is an Iberian sculpture from the fifth century BC. It was discovered in a field outside the city of Elche and was in such good condition and so interesting architecturally that for many years experts thought it had to be a fake.
Perhaps just like this apartment. With fewer and fewer properties for sale everyday, when you do come across something worth slowing down and looking at properly, you’re first instinct might be ‘this can’t be for real’. Not a small apartment, but just 2 bedrooms so a large living area. And yes, the kitchen does adjoin the living area so a ‘cocina americana’ is very possible, you could do it yourself if you are handy with a sledgehammer.
A modern part of the city, a short walk to the riverbed, nearest metro is less than 10 minutes and there is the option to rent a car parking space if that is required. There is even a balcony. Its not huge, but enough to get out there and sit and watch the world go by with a coffee or beer.
La Dama de Elche was found in 1897, and only in 2005 was it proved finally that is was not a fake, it was in fact the genuine article. This apartment is also the genuine article, a real find, but I wouldn’t take quite so long to come to that conclusion and get in touch with us if I was you.
Villa Of The Week
This house is like a colleague who you don't really hear but always makes sure that what he or she does is good and is therefore super reliable and actually indispensable in your team.
This house is also like that, it doesn't shout from the rooftops, has a certain degree of modesty but is good and reliable. It has a lovely green garden, with lots of privacy and, of course, a swimming pool, which is indispensable in these weeks with temperatures well above 30 degrees.
On the ground floor you will find a spacious living room with a fireplace and French doors to the terrace, a very spacious kitchen, which also gives access to the terrace (this is a spacious terrace where you can put a dining table and also a nice lounge sofa), a bathroom and bedroom. And you have access to an extra bedroom with ensuite bathroom, this used to be part of the garage and is just a bit lower. This makes it a perfect guest room. The garage has been made smaller, but still offers space for a normal-sized car, just not an abomination like the cybertruck.
Upstairs you will find three bedrooms and two bathrooms, one of which is ensuite. And two of the bedrooms have balconies. A house where you can live well with your family. It comes from the 1990s and if you feel like it, you can put in some more modern bathrooms and a nice new floor and you have a yes we said, a very good place.
And then another good thing, you walk straight into the village if you feel like sitting on a terrace among the Spaniards or doing some shopping. If you feel like visiting the city of Valencia, you can get there in a 25-minute drive or take the metro.
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