Valencia New Property Prices still Rising

According to one of Spain’s most prestigious valuation companies, the price of new build property in Valencia city increased by 15.6% in 2006 and the average price per square metre now stands at €2,211 which is still almost half the price of new builds in Madrid and Barcelona. Valencia is Spain’s third largest city with a population of around 800,000 that increases to 1.5 million within a 30 km radius.

Sociedad de Tasacion S.A. has more than 20 years experience in the valuation sector. Last year it valued both property and businesses worth more than €89.6 billion.

In its study of the new build market in “Spain’s 50 Provincial Capitals” it concluded that prices increased by an average of 9.8% during 2006 with the average price per sqm now standing at €2,763.

Its prediction for 2007 is that prices will continue to rise albeit not as strongly as in 2006. Increases will be more moderate especially in areas with a good supply of available building land.

The data which was used in the survey came from 315,000 properties in 7,600 different developments. Properties of more than 150 sqm and less than 60 sqm were not included nor were attic apartments due to the distorting effect which the inclusion of such properties would have given the sizable terrace space that they tend to have. Detached houses were also excluded.

In addition, the company also provides data relating to the annualized return over the last 21 years, the average annualized return being 10.7%.It estimates that there were more than 800,000 home starts in 2006.

The data regarding Spain’s 6 largest cities are as follows:

Madrid new build prices are now at €3,870 per sqm, an increase of 6.6% in 2006 and an annualized return of 10.6% since January 1986.

Barcelona new builds are now at €4,192 per sqm, an increase of 13.3% in 2006 and an annualized return of 13% since January 1986.

Valencia new builds are now at €2,211 per sqm, an increase of 15.6% in 2006 and an annualized return of 10.9% since January 1986.

Seville new builds are now at €2,445 per sqm, an increase of 15.4% in 2006 and an annualized return of 10.5% since January 1986.

Zaragoza new builds are now at €2,851 per sqm, an increase of 17.4% in 2006 and an annualized return of 11.5% since January 1986.

Malaga new builds are now at €2112 per sqm, an increase of 9.9% in 2006 and an annualized return of 8.6% since January 1986.

In conclusion, new build property in Valencia city still represents excellent value for money when one takes into account the fact that it is a good 20% cheaper than the average price per sqm in Spain’s 50 Provincial Capitals (€2,211 vis a vis €2763). It is almost half the price of new builds in both Madrid and Barcelona, being 43% and 47% cheaper respectively.

When one also considers that Valencia will play host to Sailing’s Olympics “The America’s Cup” this year from April to July with an expected global tv audience of more than 300 million viewers as well as the more than 1 billion Euros being spent on infrastructural devlopment, investing in property in Valencia becomes all the more compelling.