Real estate market analysis Valencia 2022 Q4: a recap and a perspective

Analysis real estate market Valencia 2022 Q4

For the past year, we have provided quarterly updates on Valencia’s real estate market. Time for a look back at the past quarter and, of course, a look ahead to 2023.

General situation real estate market Spain

The average price of properties (new construction and existing construction) increased by 2.5% between the third and fourth quarters, bringing the year-on-year increase in the last quarter of the year to 8.8% and the average increase for all of 2022 to 8.1%. This fits well with the average inflation rate in the Spanish economy, which is around 8.5%.

Average m² prices are still not at the level they were in 2007, before the financial crisis began. However, they have been steadily on the rise since 2015. Since the “corona dip,” figures have been rising every quarter, but still attractively priced. 

More on Spain’s Q4 2022 real estate data can be found here.

Analysis Real Estate market Valencia by province
House prices year-on-year increase by province. Valencia 9.5%!

Property prices Valencia vs. other cities in Spain

Looking at Spain’s three largest cities, Valencia city ranks second in terms of year-on-year increase in house prices, just as it did last quarter. That means property prices in Valencia city are now on average 8.5% higher than the same period a year ago. On average, this year-on-year increase in Spanish cities this last quarter is between 3 and 6%.

Nevertheless, in Valencia city the average price per square meter is still substantially lower than in Barcelona and Madrid. In Barcelona, the average house price in Q4 stands at €3,591 per square meter, in Madrid at €3,583 per square meter and, still far below, Valencia city at €1,826 per square meter.

Average m² prices by city (n.b.: only Catalonia to Madrid are on this image)

House prices Valencia city by area

Like last quarter, there are four areas in Valencia city that show high price increases of more than 10% year-on-year, however, all four are not the same areas as last quarter. As in Q3, here we see Quatre Carreres and Camins el Grau, now they lead this row with Patraix and Pobladus del Sur (around Albufera, south of the city).
Analysis real estate Valencia 2022 Q4 area
Average m² prices by area
The most expensive areas in Valencia city in 2022 Q4 are without change Ciutat Vella, Eixample and El Pla del Real, and Campanar may now join them. All have property prices of more than €2,000 per square meter.

Return on rental Valencia

Interested in buying a house in Valencia city for investment? On average, the gross return on rentals is now 4.6%, obviously depending on the neighborhood and the type of house. By comparison, in Barcelona the average return from rentals is 4.2% and and Madrid 4.4%. Small differences, but since house prices in Valencia are still lower on average, it does make it a lot more accessible to make a good investment in Valencia city.
real estate market Valencia 2022 Q4
Average price per m² - Percentage price increase year-on-year - Average return on investment

Forecast real estate market Valencia 2023

Experts expect inflation to have some impact on demand for real estate in Valencia and Spain in general. Nevertheless, the inflationary climate may actually encourage the investment of savings in real estate (better to invest in bricks when inflation occurs), so sales and purchases do not fall, but remain at levels close to those of last year.

Also, the number of good houses for sale in Valencia is limited and international demand is still high. As a result, there will continue to be pressure on prices.

In short, even in these times of inflation and with the increased desire for living in Valencia, Valencia remains a good investment option. On top of that, Valencia city is currently in a “rental crisis” (link to why not rent but buy Valencia); there is a lot of demand for medium- and long-term rental properties. So buying a house in Valencia for investment is definitely a good option for a returnable investment.

Would you like more advice on investing in property in Valencia, or would you like to hear our advice on the different regions or, for example, interesting new construction projects? Then contact us now and we will be happy to help you.

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Dream Properties Valencia is Certified Estate Agent based in Valencia and meets all legal requirements to carry out the profession of estate agent in the Comunidad Valenciana.

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