Lucas Fox Valencia sees transactions grow by 20%
Foreign buyer market share grows
New homes market begins to show signs of recovery
Valencia’s moment under the property spotlight is coming. After property prices and the number of sales transactions more or less halved from the start of the property crisis in Spring 2007 to the beginning of the recovery midway through 2014, Spain’s third city is now showing steady gains and attracting investors looking for good returns.
Lucas Fox Valencia’s latest market data makes for encouraging reading. Property sales transactions in the first four months of 2018 increased by 20% over the same period in 2017. Data from Spain’s National Institute of Statistics (INE) shows a similar trend with sales in the first quarter of this year up by 17% compared to the same period in 2017.
Property prices are currently less than half those of Barcelona and Madrid on average, according to Idealista,which shows prices in Valencia ending the first quarter of 2018 on €1,743 per square metre, in Barcelona €4,334 per square metre and in Madrid €3,540 per square metre. Valencia prices are picking up however – they ended Q1 2018 up €205 compared to the same period in 2017, showing an annual growth rate of 13%. The districts popular with foreign buyers such as Eixample and El Pla de Real saw price rises of 10% and 13% respectively.
Lucas Fox Valencia data also shows that the number of foreign buyers has increased – from 10% in the first four months of 2017 to 33% in the same period this year. The figures also show that 58% of Lucas Fox buyers purchase a home in Valencia as a primary residence, 25% buying as a second residence and 8% as an investment.
The appeal of the Valencia lifestyle to foreigners isconfirmed by recent government figures. The Spanish Registrars Association (Registradores) showed that 10% of total sales completed in Valencia in 2017 were made by foreigners, above that of both Madrid (6%) and Barcelona(9%)
“Valencia has all the amenities and services you would expect from Spain’s third city but its manageable size appeals to foreign buyers, as do the beaches to the north-east of the city where the mix of apartments and townhouses with communal pools and play areas make them popular with families,” explains Juan Luis Herrero, Partner of Lucas Fox Valencia. “For those familiar with the city and its recent development, the current buzz surrounding it comes as no surprise. It is now a growing hub for business and innovation and is home to leading companies such as Ford, BP, Mercadona and Caixabank. Communications with the rest of the country and Europe are excellent – you can arrive in the centre of Madrid in less than an hour and a half on the AVE fast speed train whilst recent data shows that Valencia airport arrivals are up by 19% year-on-year to April 2018 with Italians, Germans and the British making up the biggest proportion. It will only be a matter of time until Valencia becomes as internationally known as Barcelona and Madrid.”
A significant sign that the property recovery in Valencia is well underway is the growing numbers of cranes hovering over the city. New homes are now in continual demand with Valencia seeing a 5% rise in the number of turnkey home sales in 2017 compared to 2016 (INE). One such project is Jardines de la Ciudadela, 3 and 4-bedroom apartments currently promoted by Lucas Fox. The building is situated next to the Turia Gardens, the parkland famous for its futurist museums on the old site of Valencia’s Turia River. Prices start at €505,000.
“The property recovery has been slower in Valencia than in Barcelona and Madrid,” adds Mr Herrero. “But with increasing demand and supply for new homes we expect to see a noticeable change in the pace of the market over the next few years. Modern homes such as Jardines de La Ciudadela not only make an ideal primary or secondary residence but are also a great long-term and rental investment – some of these homes could attract a rental yield of between 5 and 6%.”
Lucas Fox Valencia opened in 2014 with just 3 people and in less than four years, theregional office has grown to incorporate a team of 24 staff based in two offices in the city centre and a third in the beach area of Patacona.