VALENCIA – House sales in the Valencia region increased by 54% in the first eight months of the year. The sector expects the trend to continue as it is encouraged by the ‘already solid’ economic recovery.
House sales in the region is thus almost reaching the pre-pandemic rhythm. So says Félix Lores, analyst at BBVA Research and co-author of the report ‘The real estate market in Spain and the Valencian Community’. The report was presented on Thursday at the fifth Real Estate Sector Debate Conference of the Urbe real estate exchange. This fair opened its doors on Friday at Feria Valencia and brings together hundreds of professionals in the sector.
The purchase of homes in the region in particular rose by 54% in the first eight months of the year. According to Lores, quoted in the newspaper Las Provincias, this is a “positive scenario, even more than expected”. Improving household expectations, stagnant demand – which would be around 125,000 homes in Spain – and the continuation of favourable financing conditions will all help the trend continue.
Year-end houses sales expectations higher than pre-pandemic
In fact, the report’s author emphasises year-end sales expectations are already higher than recorded before the pandemic. “We can say that the page has already turned to the current crisis and the dynamics of sales in segments such as single-family homes, perhaps prompted by a change in way of life due to the pandemic.”
No new construction
On the other hand, prices are also rising more than expected due to the lack of new construction. That fell by 11% between January and August this year in the Valencia region.
‘Notable differences’ with previous crisis
In spite of everything, Lores warns of the consequences that “regulatory uncertainties”, such as the delays in the adoption of the new housing law, may have. This despite the fact there are notable differences between the 2008 crisis and the current one.
“There is no oversupply, rates are very limited and prices will actually rise compared to the collapse of the previous crisis,” he says. Among municipalities, according to this survey, the recovery in the first six months of this year is noticeable in cities such as Mislata, Oliva, Dénia, Xàbia, Novelda and Sueca.
Housing supply in Valencia city falling
Fernando Cos Gayón, the president of the UPV housing observatory, warns that supplies to the city of Valencia are running out. Specifically, he indicates there is 32% less supply than a year ago. In addition, the capital no longer has any land to build on. Furthermore, there is potential danger with regard to the house price level due to future inflation growth and price increases of materials.