Else Beekman
No investor embarks on a project expecting financial loss. This principle is guiding many real estate developers in Valencia, who are now avoiding the southern parts of the city following recent devastating floods.
According to the College of Property Agents of Valencia (Coapiv), there is a growing reluctance to invest in flood-prone areas. Developers shift their focus towards the northern suburbs, which are perceived as more attractive and financially stable.
Flood damage alters investment priorities
The economic toll of the flooding in southern Valencia has been severe. Many communities are still struggling to recover. As a result, real estate developers are reconsidering their strategies. Vicente Díez, spokesperson for Coapiv, confirms this shift in Las Provincias, stating, “The developers we have spoken to are actively searching for land north of Valencia and have ruled out projects in the south.” In the northern suburban municipalities of Valencia, such as La Eliana, Godella, and Rocafort, various residential projects are currently under development.
In addition to financial concerns, fears of future flooding also play a role in discouraging investment in these areas. Developers are increasingly wary of sites near ravines and low-lying zones that could be vulnerable to extreme weather events.
Housing demand shaped by recent floods
The impact of the floods extends beyond developers—potential homebuyers are also reassessing their options. The real estate sector reports that demand for homes in flood-affected areas has declined. Buyers from outside the region are preferring properties in safer locations. For many, the prospect of living in a recently devastated area is unappealing, even if they can find cheaper housing there.
Thousands of displaced residents need housing
Adding to the crisis, the catastrophic flooding has affected more than 60,000 homes across 70 municipalities in Valencia, worsening an already strained housing market. According to the College of Registrars, many of these properties are now uninhabitable, with 491 homes evacuated due to structural risks and over 1,600 classified as unsafe. As a result, thousands of displaced residents are seeking alternative housing, increasing pressure on both rental and sales markets.
Key factors that influence purchasing decisions
However, some key factors continue to influence purchasing decisions. Proximity to Valencia remains a significant attraction, as does the price of real estate. Even in flood-hit areas, some developments remain viable. One example is the Sociópolis project, where despite recent floods, demand has persisted. Developers such as Albaluz, a company from Castilla-La Mancha, have acquired land in the La Torre neighbourhood to build nearly 500 new homes.
Affordable housing
The affordability crisis in the housing market is another crucial factor in shaping development trends. There is a pressing need for more accessible housing options with property prices soaring in recent years. In projects like Sociópolis, a significant portion of new developments will include government-subsidised housing (Vivienda de Protección Pública, VPP), ensuring more people have access to affordable homes.
Flood protection measures
Furthermore, developers are incorporating flood-resistant designs into their construction plans to mitigate future risks. These measures include improved drainage systems and elevated foundations, which aim to reduce the impact of heavy rains and potential flooding.